Angels In America

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founded 2003 | members: 16 | total invested: undisclosed | companies funded: 4 | www.technology-tree.com

The World-Changers

Investors' Circle

Brookline, Massachusetts, San Francisco

The oldest organization on our list has a funky combination of loose structure and social activism. The website defines the group as a "national network of early-stage private investors who seek financial, social, and environmental returns on their investments." Though members are scattered across the country, "ethos holds us together," says chairman and CEO Woody Tasch. Applicants submit business summaries to the website; the up to 60 that are approved by the staff each month can get circulated, for a fee of $350, to the members nationwide. From there, any number of things can happen. Often the member who has the best combination of proximity to the company and experience in dealmaking will lead a group of members to invest. An affiliated professionally managed fund, Commons Capital, serves members who don't have the time or deal experience to invest individually. Alternative energy is an important category for this group. Investors' Circle also supports localizing the food supply chain; hence its support of the Farmers Diner, a Vermont restaurant that gets most of its food from nearby farms and is planning to expand to a national chain of diners that do the same thing for their local agricultural communities.

founded 1992 | members: 130 | total invested: $100 million | companies funded: 163 | www.investorscircle.net

Sidebar: Do Not Say, "I Just Want the Money"

And other keys to presenting yourself before potential investors.

Be able to describe your business—what it does and who it sells to—in less than a minute.

Have a handle on who the competition is, why your solution is better, and how you are going to gain market share.

Avoid unrealistic "hockey-stick" projections that show your product or service suddenly rocketing. It won't.

Emphasize the likely exits for investors.

Answer all questions honestly; don't try to hide information that doesn't support your case.

Have respect for your prospective investors. Understand that those who do invest are going to be involved with your company for a long time. Often one or more of your investors will take a seat on your board of directors. They know things you don't. Don't tell them you "just want the money."

Prepare yourself. Many groups offer free coaching to entrepreneurs who have passed their initial screens and are about to present before the entire group.

Sidebar: "Money Is Not Just Green"

What angel investors know and entrepreneurs need to.

Some entrepreneurs out there are extraordinarily independent. They want to do it all themselves. Those people never come to angel groups, or if they do, they say, "My way or the highway," and that usually means the highway.
—James Geshwiler, CommonAngels

What you really need is a good CEO. You can find a CFO or a controller or whatever. And then you need a good VP of sales with a hundred-day mentality. That's a guy who's interested in getting deals closed quickly.
—Bill Weaver, Chicago angel

I want to see somebody who's going to lay himself down in front of a freight train if that's what it takes. I don't want to have to worry about somebody seeing that the going gets a little bit rough and then they say, Well, sorry, you've got a write-off, and I'm going back to work for my uncle.
—Bob Geras, Chicago angel

Entrepreneurs fail to understand that not all angel investors are equal. Money is not just green. There is what we call smart money and obnoxious money. And obnoxious money will cost you time and energy.
—Carol Sands, Angels' Forum

Entrepreneurs are always entranced with their own idea.
—Bill Weaver

We have some very high-level biotech execs in our group, and scientists. But each area is so complex, and they're such niche ideas, we get plans in and we go, huh?
—Geoff Maletta, Angel Healthcare Investors

Sometimes the best thing you can do for somebody is just tell him, Don't try it.
—Bob Geras

For more on angel investors, visit "How to Find an Angel Investor."

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