Benjamin Kuo’s Blog

In recent conversations over the last few weeks about investment activity here in Southern California, I’m finding more and more entrepreneurs are looking to technology angels — that is, high profile folks from the technology industry with recent exits — rather than venture capitalists. In particular, in the consumer Internet and web space, the capital requirements that these entrepreneurs think they have — usually, in the $250K to $500K range — are fairly modest, versus traditional larger VC investments.

Although there are a number of very high profile, non-Southern California “super angels” that it seems everyone I talk to wants to get to — Jeff Bezos of Amazon.com, Ron Conway, Marc Cuban, and Elon Musk (plus, about everyone else from Paypal) come up in my conversations with entrepreneurs all the time — it seems Southern California individual angels get less attention. However, there seem to be a few people here — Michael Jones of Userplane/AOL comes to mind, as do Matt Coffin of LowerMyBills.com, Richard Wolpert of Realnetworks/Disney Online (now a VC), and Kamran Pourzanjani of PriceGrabber — who entrepreneurs are adding to their list as “go to” angels. It will be interesting to see how the trend towards looking to these “super angels” first goes here in Southern California.

The deadline for the Tech Coast Angels’ Fast Pitch competition in Orange County is approaching rapidly. The event — where you can pitch your startup to angel and venture investors through a quick “elevator pitch” — is coming up in May. If you’ve never attended, the event challenges startups to pitch their company in less than 60 seconds, with the top prize being a screening session with the Tech Coast Angels. From an email to me from Atticus Wagner, the Investment Screening Director for the LA and OC chapters:

Tech Coast Angels

8th Annual Fast Pitch Competition
Monday May 19, 2008   6:00 pm - 9:00 pm
Anaheim Marriott, 70 West Convention Way, Anaheim, CA 92802
Meet, greet, and learn the art of the pitch from the Tech Coast Angels, the nation’s largest and most active network of angel investors.
APPLY NOW @ www.PitchTheAngels.com

Applicants to Fast Pitch – You must apply by Thursday April 10th

The companies I’ve talked to about the process give high marks to the event, but even more to the one-on-one coaching that the angels provide ahead of the event to finalists. Go to www.pitchtheangels.com to apply.

Despite the strangely giddy startup and venture capital market, I’m hearing from a number of sources about one place the woes of Wall Street are hitting the startup market now: in the willingness of angel investors to invest in companies.

I’m hearing that some angel investors — who typically have a great deal of their wealth tied up in stocks, bonds, and similar investments –  have been somewhat more conservative in their startup investments recently.
It’s not so much any reaction or response to the future prospects of the startups they are talking to, but more a function of how much disposable wealth they happen to have on hand at the moment.

Angel investors tend to make their investment decisions somewhat based on how much spare cash they might have from their other investments. On the other hand, I am hearing from some professional venture capital investors that they are encouraging and looking to inject larger rounds into the companies they do fund, to give them some cushion to glide over whatever kind of economic climate shakes out over the next couple of years.

One of the helpful angel investor groups here in the region has recently opened up a new blog, focused on providing useful advice to entrepreneurs. The group has launched Ask The Angels. Pasadena Angel Joe Platnick describes the blog:

Each week one (or more) of our team members will be writing about a topic of particular interest to entrepreneurs. And they’ll also be available to answer your specific questions on a wide array of topics. Over the next few months, you’ll see a number of noteworthy guest contributors as well.

The members of the Pasadena Angels are heavily involved in a number of efforts within the Los Angeles area to bolster entrepreneurs and high tech companies; the group, which is centered around Pasadena, also makes investments in the greater Los Angeles area as a whole, and members can often be seen working alongside the Tech Coast Angels.

Inagural posts include one by Steve Yeich on A Silver Bullet For Early Stage Marketing, and one from Barry Paulk on Recruiting and Team Building.

Sid Mohasseb is the new President of the Tech Coast Angel’s Orange County chapter. Sid has been adding his voice to the local tech community through his blog on entrepreneurship (which I’ve pointed to before) and runs local tech acceleration firm Venture Farm. Sid is not the only Tech Coast Angel with a blog, of course — Frank Peters (President of the overall TCA network) also runs his own podcast, the Frank Peters Show. It looks like the Orange County chapter of the Tech Coast Angels is winning so far in terms of blog/podcasting efforts. There are, however, a few other angel investor bloggers here in Southern California, including Tech Coast Angel member Toni Dasgupta, and the Pasadena Angel’s Ken Hayes.

Atticus Wagner at the Tech Coast Angels let me know last week that the Tech Coast Angels is now taking applications for their Fast Pitch event coming up in January. For entrepreneurs who aren’t familiar with what a “fast pitch” is, it is a very short, 60 second “elevator pitch” on your company. The idea behind the competition is to pit a number of entrepreneurs — all looking for funding — in a competition to see who can best convince an investor to make an investment in their company. It’s very informative, entertaining, and actually a useful skill to have. Last January, the winner of the Fast Pitch was Leads360. Frank Peters (podcaster and president of the Tech Coast Angels) has an archive of that winning pitch posted on his podcast page; Leads360 eventually raised $3.25M in a venture round from Rustic Canyon Partners.

Luis Villalobos (founder of the Tech Coast Angels) had a great article on the Kauffman Foundation’s web site posted last week, which covers the thought processes behind valuing a company (from an angel’s point of view).

BusinessWeek recently ran an interview with the Tech Coast Angel’s Richard Koffler on pitching your firm to investors. It’s worth reading–the Tech Coast Angels gets lots of pitches every year, and also runs two Fast Pitch competitions (one in Los Angeles, the other in Orange County) every year which are well worth watching.

Some interesting items for today: Google just added a Flash slideshow feature for the firm’s Picasa online web picture albums, and to show it off they’re posted a slideshow of their new Santa Monica offices. Plus, Luis Villalobos of the Tech Coast Angels gets his picture in the New York Times, along with an extensive writeup of the angel group. The article quotes Richard Morganstern, the president of the Los Angeles Chapter, as well as Kevin Scanlon, one of the group’s members, and also covers local startups Language Weaver, Xengaru Fund Foods, and Youmail.