Angel List (which match makes between angel investors, potential investments they might make in startup companies, and jobs at startups) launched Syndicates at the end of September. There were a couple of weeks in October where the investment community in the Valley talked about nothing else.
Syndicates make it much easier for an individual investor to gather a coterie of like minded investors who want to follow his lead, and for that individual to earn 10-20% of the profit on the fund that he generates as 'carry'.
There have been a respectable number of syndicates established since - it's too early to tell what the outcomes are likely to be - angel investing is a long game, since the average time to exit is 7 years or so.
Tim Ferris and Jason Calcanis were the launch candidates for syndicates, raising about $300K each in the first week. Think of it as professional grade Kickstarter, for accredited investors.
Adding reference to Hunter Walk's post - he'd like to see syndicates to fund: international deals; bundling expertise; alternative liquidity outcomes. In other words, using Angel List to organize the mechanics of putting a fund together, increasing the leverage an individual investor can have.
from Dan Primack's newsletter...
** I've been in the Bay Area for less than 24 hours, and already I've had four different conversations with VCs about AngelList. In short, it's a combination of shock and awe.
Now comes word that Foundry Group has become the first traditional VC firm to launch an AngelList syndicate. It's $2.5 million in total ($50k into 50 companies), with Foundry's cornerstone commitment coming out of its general fund.
This will be seed deals, but I do have to wonder if AngelList syndicates ultimately are going to be used for the types of Series A deals that firms like Foundry focus on. And, if so, AngelList could be disruptive to much more than just the historical angel group and the more recent spate of micro-VC funds. I think that's why so many VCs seem nervous.
I asked the Foundry guys a bit about this, and here was partner Jason Mendelson's reply:
"I think that it's possible they go into Series A fundings. I think the verdict is still "out" on how much help" syndicates will be to entrepreneurs versus VCs. I think most VCs, despite their marketing efforts, don't help out entrepreneurs very much, so for these firms I do think it will disrupt the market. For VCs that have real reputations for helping entrepreneurs, I think there will be much less change.
As for fund structure, technically LPs could do better with a structure like this is all goes well. AngelList is not only no fee / no carry to the syndicate leader, but gives back carry giving our investors a potential larger return. It's all very early. We'll see what happens, but we definitely wanted to be involved here."
As a Global Scot, I get occasional requests from Scottish Enterprise to help with their mission to help grow companies in Scotland. As part of a 'learning journey' this week there was a Connect event, where several of us worked with the Scottish visitors. it was held in DLA Piper's SF offices, which happen to have an excellent view of the construction project for the new Transbay Transit Center.
Managing Customers was the content request to me. The time limit was 5 minutes, so I didn't talk about even half of the material.
Two big areas of necessary focus are Lean Startup (think small data around validating experiments, moving quickly to improve the offer to prospects based on the measured data); and Big Data, as applied to analyzing customer sentiment, to retail trends, to genetic assay and to anything else where there is a large volume of data and for which the business may be able to identify patterns.
My earlier post 'Moving to Silicon Valley' has more useful background.
Last Friday was Demo Day for the first batch of companies to go through TechStars London.
As a previous mentor for TechStars, located in California, having UK investments in other small companies, I volunteered to mentor for the London batch. This led to useful interaction with OP3NVoice, who aced the demo - they took lessons from Keen.io, who graduated from TechStars Cloud in 2012.
Editing (September 2014) - op3nvoice changed their name to clarify.io , and moved to Austin, TX.
IBM arranged a nicely balanced afternoon and early evening event for the 'demo day' for the US finalists in their Smartcamp competition. This is a worldwide event, held in many locations over a year, for small companies interested in partnering with IBM - it's one way in which IBM gets visibility into the universe of new technologies and ideas which would otherwise be beneath the radar for their business groups.
Coriell Life Sciences was judged the best of the batch; they had much the best blend of technology and business case for how the genomics data processing ecosystem they are building is going to make money. " .. healthcare providers, patients and payors can take advantage of the available sequencing technology while carving out and interpreting only that data needed for immediate use and securely storing the data in the GeneVault for future interpretation."
The Computer History Museum is a fine venue for this kind of event - the auditorium upstairs had plenty of space for the investors and invited members of the public attending in the afternoon; after the museum closed the downstairs foyer makes a fine space for drinks, hors d'oeuvres and conversation.
Brenda Magid from IBM (who had put together the judging panel) and I may have been the only two people attending who had also been at the previously blogged event, EIE13 in Edinburgh.
Daima Energy Solutions
Global Surface Intelligence
Swift TG Energy (Scotland)
During the week of EIE13, unfinished business from EIE11 resolved. As part of the 'thankyou for speaking' I'd been given a bottle of whisky; which created a dilemma - when I travel I don't check bags, and I was leaving Edinburgh to go back to California. Colin Adams was kind enough to say "We'll keep it for you"
Accordingly, when I coincided with Colin going up in the elevator in the Appleton Tower, I reminded him about the neglected whisky. He was able to say "come over later in the week and we will find it for you". The bottle found a good home as a house warming present for my brother, I tasted the whisky, and Informatics Ventures kept its promise. All excellent things.
Scotch Malt Whisky society single cask 3.198
Smoker's tooth powder and dentists' chairs (sherry cask)
Nose suggests coal, slate and gravel, driftwood bonfires, barbecued ribs, perfumed smoke, toffee and sherry ; smoker's tooth powder and dentist's chairs later. The palate has big toffee, decent smoke, honeyed chicken wings, balsamic, hot leather, ash and various minty notes.
On Wednesday evening I was one of the presenters at the monthly Techmeetup event in Edinburgh.
At least 65 people came (though at least some of them came for the free beer and pizza). It's a good networking event, and has turned into one of the better ways to announce that you are hiring or looking for a technology job.
Am in Edinburgh for a week. Have been enjoying the dry spring weather - the locals tell me this is the best weather they've seen for months. Traffic wardens are going about with their sleeves rolled up.
I'm giving a techtalk on Wednesday evening, at the Appleton Tower. Start time 18.30, 8th floor, as part of the Tech Meetup talk series.
Title 'Behind the Cloud - pointers to the future' - reviewing the current state of Cloud Services as infrastructure, the opportunities made possible by those services, and some of the interesting companies with which I'm involved which are building technology to use and improve the Cloud.
Will be at the EIE13 investor conference on Thursday, at the Assembly Rooms - send email to email@example.com if you want to meet up.
Last week there was a dinner meeting for the Saltire Foundation. SF is a long term project to improve the capability of people in Scotland; Scots generate lots of good ideas, but haven't been able to turn them into profitable businesses at a comparable rate to the rest of the UK, Europe, and the US.
This is being done by two programs, one for Scholars, one for Fellows. Applicants for both are competitive and awarded on merit. Scholars are undergraduates who get intern positions in companies outside Scotland before returning to complete their degrees. Fellows are graduates who go through a entrepreneurial leadership course at Babson College, Boston, then deliver projects both outside and inside Scotland. Both of these programs build self confidence and capability, giving the participants a global perspective in a short period of time.
The Foundation is a registered charity, in the US and the UK. It operates with a small number of staff and lots of volunteer support. I've donated some money to it for operating expenses, and would encourage you to do likewise.
An even better way to support the cause would be to employ an intern. Greg Sim, a 2012 Fellow, is working for my brother's company, Ecosse Subsea, which is pioneering new methods for subsea pipe and cable laying.