Inaugural Open Angel Forum Was a Success

Posted on Jan 15, 2010 | 57 comments


OAF-Logo-Med-300x155Last 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.

Oh, and hats off to Tyler Crowley and Alex Miller, the magic guys who really do much of the work behind the scenes to pull off these great events that Jason dreams up.  They deserve more credit.

  • http://stickyslides.blogspot.com Jan Schultink

    How much effort was put in to the pre-selection? How many companies went into the process that lead to the 5 presenters? My suspicion is that there was a high threshold to get in here, similar to the effort/quality required to get to a presentation to a partner group of a fund.

  • http://twitter.com/arelt Arel Tsalach

    Mark,

    You, Jason and all the other angel investors who attended the Open Angel Form are a blessing to all of us entrepreneurs in our early startups stage. This is so encouraging, thank you!

    Do you really believe a local angel is so critical especially with the latest communication technology these days? There are million dollars companies who run with no physical office (wordpress etc).
    I do agree there is nothing like the face to face human touch, but would you consider that as a deal breaker?

  • http://twitter.com/steepdecline steepdecline

    Jan, we had ~150 startups apply. We simply picked the best of the bunch based on mix of fundability / valuation / team / market and idea.

    Yes obviously the quality would have to be similar, although not everyone has access.

    The presenting companies will be on thisweekinstartups.com today about 3pm PT (after the Brad Feld episode at 1pm) talking about their experience.

  • trendslate

    Sounds like a terrific event! Let us know when the next one is being held, as it would be great to compare OAF to the upcoming TCA fast-pitch competition (for which we're a media sponsor)

  • http://twitter.com/steepdecline steepdecline

    I concur with Mark's point about location / proximity. As more chapters open this will naturally self-correct.

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  • http://twitter.com/justyn Justyn Howard

    Tyler – let us know when you're ready to ramp up in Chicago. We're packing the house with Chicago Tech Meetup and would be happy to help promote/coordinate. http://meetup.com/chicago-tech-meetup

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  • http://www.defunkte.es DefunktOne

    Love the part about the TCA website. I was part of a pitch to them a few years ago and the website is not far off in age from the folks we were pitching to! But I would still say TCA is fair and thorough. They just really need an image makeover…

  • http://bothsidesofthetable.com msuster

    Yes, it is exclusive and hard to get into a presentation and the same skills are required to get selected to present as would be a partners' meeting. The key difference is that if you're selected there are 20 different funding sources in the room. And sometimes it is a good litmus test of entrepreneurial skills to see who actually knows how to network and get selected.

  • http://bothsidesofthetable.com msuster

    Not a deal breaker, no. But I believe that it is in the entrepreneur's best interest as well as in the investor's.

  • http://bothsidesofthetable.com msuster

    Agreed. But they have some new blood like Scott Sangster that is helping reshape the organization.

  • http://lmframework.com/blog/about David Semeria

    The OAF is simultaneously heartening and not.

    On the one hand it's good too hear about the progress, but on the other… if the most sophisticated capital raising culture in the world has to re-engineer a key part of the process – it doesn't bode well for the rest of us.

    I was recently talking to an Italian VC. I asked him if he had trouble sourcing deals. He looked at me with a mixture of pity and incredulity, replying “there are 2 active VC funds in Italy, the deals find us”.

    The idea that a country with around 60m inhabitants, – and with a history of innovation that includes radio (beyond doubt) and the telephone (arguably) – has to make do with 2 active VC funds is pretty depressing.

  • http://stickyslides.blogspot.com Jan Schultink

    How much effort was put in to the pre-selection? How many companies went into the process that lead to the 5 presenters? My suspicion is that there was a high threshold to get in here, similar to the effort/quality required to get to a presentation to a partner group of a fund.

  • http://twitter.com/arelt Arel Tsalach

    Mark,

    You, Jason and all the other angel investors who attended the Open Angel Form are a blessing to all of us entrepreneurs in our early startups stage. This is so encouraging, thank you!

    Do you really believe a local angel is so critical especially with the latest communication technology these days? There are million dollars companies who run with no physical office (wordpress etc).
    I do agree there is nothing like the face to face human touch, but would you consider that as a deal breaker?

  • http://twitter.com/steepdecline steepdecline

    Jan, we had ~150 startups apply. We simply picked the best of the bunch based on mix of fundability / valuation / team / market and idea.

    Yes obviously the quality would have to be similar, although not everyone has access.

    The presenting companies will be on thisweekinstartups.com today about 3pm PT (after the Brad Feld episode at 1pm) talking about their experience.

  • trendslate

    Sounds like a terrific event! Let us know when the next one is being held, as it would be great to compare OAF to the upcoming TCA fast-pitch competition (for which we're a media sponsor)

  • http://twitter.com/steepdecline steepdecline

    I concur with Mark's point about location / proximity. As more chapters open this will naturally self-correct.

  • http://twitter.com/Justyn Justyn Howard

    Tyler – let us know when you're ready to ramp up in Chicago. We're packing the house with Chicago Tech Meetup and would be happy to help promote/coordinate. http://meetup.com/chicago-tech-meetup

  • http://www.defunkte.es DefunktOne

    Love the part about the TCA website. I was part of a pitch to them a few years ago and the website is not far off in age from the folks we were pitching to! But I would still say TCA is fair and thorough. They just really need an image makeover…

  • http://bothsidesofthetable.com msuster

    Yes, it is exclusive and hard to get into a presentation and the same skills are required to get selected to present as would be a partners' meeting. The key difference is that if you're selected there are 20 different funding sources in the room. And sometimes it is a good litmus test of entrepreneurial skills to see who actually knows how to network and get selected.

  • http://bothsidesofthetable.com msuster

    Not a deal breaker, no. But I believe that it is in the entrepreneur's best interest as well as in the investor's.

  • http://bothsidesofthetable.com msuster

    Agreed. But they have some new blood like Scott Sangster that is helping reshape the organization.

  • http://lmframework.com/blog/about David Semeria

    The OAF is simultaneously heartening and not.

    On the one hand it's good too hear about the progress, but on the other… if the most sophisticated capital raising culture in the world has to re-engineer a key part of the process – it doesn't bode well for the rest of us.

    I was recently talking to an Italian VC. I asked him if he had trouble sourcing deals. He looked at me with a mixture of pity and incredulity, replying “there are 2 active VC funds in Italy, the deals find us”.

    The idea that a country with around 60m inhabitants, – and with a history of innovation that includes radio (beyond doubt) and the telephone (arguably) – has to make do with 2 active VC funds is pretty depressing.

  • http://stickyslides.blogspot.com Jan Schultink

    Option 2 sounds like a better proposition for an angel investor to spend time on:

    Option 1) A bunch of startups that had to pay their win, without much selection
    Option 2) 5 out of 150 startup selected by seasoned investors…

  • http://stickyslides.blogspot.com Jan Schultink

    Much be an interesting experience for an entrepreneur with a good story to see excitement building up in the room, including the “tension” of competition among the investors, all of them thinking “Hmmm, I want in on this one” at the same time. When you are presenting for just one VC you probably feel “in the hot seat” all the time.

  • http://stickyslides.blogspot.com Jan Schultink

    Option 2 sounds like a better proposition for an angel investor to spend time on:

    Option 1) A bunch of startups that had to pay their win, without much selection
    Option 2) 5 out of 150 startup selected by seasoned investors…

  • http://stickyslides.blogspot.com Jan Schultink

    Much be an interesting experience for an entrepreneur with a good story to see excitement building up in the room, including the “tension” of competition among the investors, all of them thinking “Hmmm, I want in on this one” at the same time. When you are presenting for just one VC you probably feel “in the hot seat” all the time.

  • http://arnoldwaldstein.com awaldstein

    Mark

    I just wanted to add my praise to Jason, you and others for this movement.

    The web democratizes the market and the opportunity for startups. This movement begins to democratize the funding cycles. This is the right direction.

    Thnx.

  • http://bothsidesofthetable.com msuster

    Interesting. I hadn't thought of it that way but the truth was it was much less of “the hot seat” than a VC presentation – you're right.

  • http://bothsidesofthetable.com msuster

    Venture Capital in a country is a function of how open the local laws & regulations support entrepreneurship and how entrepreneurial the communities are. A recent Op-Ed in the NYTimes http://awe.sm/36SVA talked about how more VC goes into Israel (7m people) per year than all of France & Germany combined (130m people).

    Having lived and worked in many European countries I can say that if Continental Europe (i.e. excluding the UK) really wants to compete on a global scale it will need to change many laws to encourage and protect both entrepreneurs and investors. Right now the system is geared toward old-school, labor-protective laws designed to protect both cronies and industrial revolution working practices. It's a shame. So much talent, such bad entrepreneurial legislation.

  • http://lmframework.com/blog/about David Semeria

    Good answer Mark – but that's only one aspect.

    Many European companies are forced to go to London to look for capital, even if they don't intend to relocate.

    There is a pretty robust case for top-down stimulus (ie more VC funds) as well as grass-roots changes to legislation.

  • http://bothsidesofthetable.com msuster

    You have to go to London because the VCs are there. The VCs are there because the legislation is more entrepreneur friendly and has produced more successes. I know because I've talked with and seen first hand VC investors get burned by the French and German governments and decide to place their investment money elsewhere as a result going forward. Money follows opportunity, not the reverse. I haven't even met any that tried to do VC in Italy, one of my favorite countries on the planet. What a shame. But I don't believe top-down will work.

    BTW, one of my closest friends in the world is a private equity (buy out) professional in Milan. If it would be helpful let me know offline and I'd be happy to connect you.

  • http://lmframework.com/blog/about David Semeria

    Thanks for the connection offer Mark, that's very generous of you, and I'll be sure to follow up.

    Just to be clear: I'm not whining about the situation. I agree with you that a good entrepreneur with a good story should have the skills to raise money from anywhere. I'm just saying that it's a pity that many European startups are funded with foreign money.

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  • http://arnoldwaldstein.com awaldstein

    Mark

    I just wanted to add my praise to Jason, you and others for this movement.

    The web democratizes the market and the opportunity for startups. This movement begins to democratize the funding cycles. This is the right direction.

    Thnx.

  • Pingback: Open Angel Forum in Boulder on 2/3/10()

  • http://bothsidesofthetable.com msuster

    Interesting. I hadn't thought of it that way but the truth was it was much less of “the hot seat” than a VC presentation – you're right.

  • http://bothsidesofthetable.com msuster

    Venture Capital in a country is a function of how open the local laws & regulations support entrepreneurship and how entrepreneurial the communities are. A recent Op-Ed in the NYTimes http://awe.sm/36SVA talked about how more VC goes into Israel (7m people) per year than all of France & Germany combined (130m people).

    Having lived and worked in many European countries I can say that if Continental Europe (i.e. excluding the UK) really wants to compete on a global scale it will need to change many laws to encourage and protect both entrepreneurs and investors. Right now the system is geared toward old-school, labor-protective laws designed to protect both cronies and industrial revolution working practices. It's a shame. So much talent, such bad entrepreneurial legislation.

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  • http://lmframework.com/blog/about David Semeria

    Good answer Mark – but that's only one aspect.

    Many European companies are forced to go to London to look for capital, even if they don't intend to relocate.

    There is a pretty robust case for top-down stimulus (ie more VC funds) as well as grass-roots changes to legislation.

  • http://bothsidesofthetable.com msuster

    You have to go to London because the VCs are there. The VCs are there because the legislation is more entrepreneur friendly and has produced more successes. I know because I've talked with and seen first hand VC investors get burned by the French and German governments and decide to place their investment money elsewhere as a result going forward. Money follows opportunity, not the reverse. I haven't even met any that tried to do VC in Italy, one of my favorite countries on the planet. What a shame. But I don't believe top-down will work.

    BTW, one of my closest friends in the world is a private equity (buy out) professional in Milan. If it would be helpful let me know offline and I'd be happy to connect you.

  • http://lmframework.com/blog/about David Semeria

    Thanks for the connection offer Mark, that's very generous of you, and I'll be sure to follow up.

    Just to be clear: I'm not whining about the situation. I agree with you that a good entrepreneur with a good story should have the skills to raise money from anywhere. I'm just saying that it's a pity that many European startups are funded with foreign money.

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  • http://www.recessmobile.com Vitaliy Levit

    Mark, thanks for the event digest. Seeing these events and your local community of support reminds me everyday how badly we need to move out west. Columbus is no place for entrepreneurs with a west coast mentality!

  • http://bothsidesofthetable.com msuster

    I guess my point is more damning. I think many foreign VC investors have been burned in Continental Europe, which makes it harder for them to attract outside capital. Labor laws make life too difficult.

  • http://bothsidesofthetable.com msuster

    I've met a few good entrepreneurs from Columbus including Wil Schroeter from Affordit.com … oh, but he just moved out West ;-)

  • http://www.recessmobile.com Vitaliy Levit

    Wil's a friend of ours. There was a whole group of us Columbus entrepreneurs who were supposed to come out around Thanksgiving to show the LA community how it's done, but the timing was off and Wil couldn't arrange for enough investors to be around then. My partner and I ended up coming out ourselves and participating in Startup Weekend LA to meet some of the locals. Ended up being a decent trip, can't wait to come back out!

  • Aviah Laor

    It looks like a fantastic project. Mark, do you think that there is some group effect that affects the investor criteria in such events? I mean, if we had a hypothetical “control experiment” where investors would meet these companies individually and in a group event, the tendency to invest in each would be the same? and do you think that such meetup is going to be the preferred first shot in raising money for start-ups?

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