Last night I attended the inaugural Open Angel Forum event started by Jason Calacanis, a fellow LA resident. Jason started the Open Angel Forum in response to his frustration that entrepreneurs were being charged by some angel organizations to present at their events. He wrote an excellent blog post on this topic.
As a former entrepreneur, I’m a big supporter of Jason’s goals. Asking young companies with limited capital to pay to present to a group of potential investors is insane. Yet many would-be entrepreneurs feel that they don’t have enough access to investors and that the opportunity to present to a group will help them short circuit the fund raising process.
This can be true if it’s the right event, but most of these events suck. And frankly one of the skills of an entrepreneur is figuring out how to get access to people that they don’t know and one of the ways that potential investors (like it or not) can judge one part of your skills is in seeing how you use ingenuity to gain access. If you want some tips on getting access I wrote a post on how to access VCs but the same logic applies to angels.
The event last night in Los Angeles was great. Local angel investors totaled 18 people including Matt Coffin, Brett Brewer, Kamran Pourzanjani, Jarl Mohn and many others that young entrepreneurs would be blessed to work with. Also present were NorCal angels including Ron Conway, Chris Sacca and Shervin Pishevar. It was also great to spend time with the founder of TechStars, David Cohen, who will head up Open Angel, Boulder.
5 companies presented for 7-8 minutes each followed by Q&A. 2 of the companies were immediately interesting to me and I have already followed up with next steps, which I guess is testament to Jason’s goals of making sure that high quality, early-stage companies get funded. In my next post I will write about one of the five companies.
Jason plans to set up Open Angel chapters in many US cities and eventually internationally. My only suggestion to Jason would be to emphasize more of the presenting companies being local. I think most great angel investing is done at a local level. At the earliest stages of a company you want to raise money from people local to you because distance = their time, attention and focus. And that’s really what you want. It was great to meet some promising companies from outside the area but 4 out of 5 wasn’t the right balance for me, personally.
There was some Twitter chat before the event about whether this “replaces” local angel funding communities like the Tech Coast Angels. It does not and that’s a good thing. While TCA has had it’s challenges (and updating your website certainly wouldn’t hurt your image, guys. Seriously, it kinda stinks) it is a legitimate funding source for Southern California entrepreneurs and has produced successes including GreenDot and MyShape. We don’t need competition – we need more overall organizations like Jason’s to helping young entrepreneurs more easily reach angel investors with no payola.
Hat’s off to Jason – you’ve started something important and of great substance. I look forward to tracking the progress.