Calling All Northwest Angels: Join AoA for the 2009 Angel Capital Association Regional Meeting!

The national organization of angel investor groups, the Angel Capital Association, will convene its northwest regional meeting in Seattle on February 24th. Accredited investors from the region are invited to join host Alliance of Angels to discuss trends in angel investing and a special workshop featuring tips for lead investors.

The morning session will feature a presentation by Sarah Dickey from the ACA, who will share the latest angel group statistics and trends. Participants will also hear the latest news on regional investment programs, including updates from Bruce MacCormack, chair of Bellingham Angel Group and David Verrill, founder of Boston Hub Angels and chair of the ACA Syndication Committee. The morning will conclude with a panel discussion, “Angel Investing in a Downturn,” in which experienced angels, including Mike Crill, managing partner at Atlas Accelerator, and angel fund manager Basil Peters of the Vancouver and Bellingham angel groups, will offer their perspectives on the impact of current economic climate on startup companies and investors.

The afternoon will be devoted to a lead investor clinic presented by Alliance of Angels’ most active and experienced deal leads, including AoA program chair Dan Rosen and Geoff Entress, managing member of Rolling Bay Ventures. Participants in this interactive, case-based workshop will gain insights into syndicating a consortium of investors, conducting due diligence; negotiating term sheets; and investment stewardship.

Members of ACA enjoy the full day of programs on February 24th and are also invited to attend an exclusive networking reception the evening of February 23rd for $125. Half-day registration for ACA members’ choice of the February 24th morning or afternoon session only is $75. Members of Alliance of Angels are also eligible for a special rate.

Accredited investors who are not members of ACA may attend the full day of programs on February 24th for $175, or choose to attend either the morning or afternoon session for $100.

Don’t miss the chance to connect with fellow angels and stay on top of best practices in early stage investing. Register today by calling Katy Tollefson at 206.389.7259.

Record-breaking Investments in 2007: The AoA Play-by-Play

Here at the AoA we think transparency is a good thing. Plus we're data junkies. Below please see a few facts and figures from our record-breaking deals in 2007. If there's anything you'd like to know and don't see, we can pretty much slice and dice our stats any way that may be of interest, so don't hesitate to email us . Also feel free to post a comment (if you didn't get enough from the thread following John Cook's blog); this month the topic of angel investing has ranged from spectator sport to bench-clearing brawl.

As with any sport, we have our own ground rules for reporting:

• We only report investments made in companies that were screened, coached and selected to present to the Alliance of Angels membership. Red flag: some groups report all investments reported by their members, regardless of whether or not the angel organization was involved.
  
• We clearly distinguish "direct investment" (our own members' investment in the companies described above) from "indirect investment" (additional investment our members facilitated through their network). Yellow flag: some groups will consolidate both categories into a single group of "facilitated" investment.
  

Just the stats, ma'am:

• 174: companies interviewed, coached, screened (90 minute meetings)
• 32: new investment opportunities that were selected from the above, and presented to our membership
• 15: investments in new companies (just about 50% of the new opportunities reviewed by our membership).
• 9: 3 minute updates made by companies who had previously presented and were funded by AoA returned to give brief presentations when seeking another round of funding.
• 8: of these 9 received follow-on funding
• 21: additional AoA portfolio companies from prior years received follow-on investment from our members.
• 44: grand total of AoA investments tracked in 2007.

Show me the money:

• $3.9 million tracked in direct funding from our membership, in AoA companies
  
• $3.3 million in additional sources facilitated by AoA ("indirect" funding)

• 87% of the new companies who received investment were high-tech
• These deals received 85% of the total direct dollars (the other 13% of deals, 15% of dollars were consumer product and retail).
• 93% of companies receiving follow-on investment were high-tech, and received 92% of this category of funding (correspondingly, 7% of the deals were consumer/retail and received 8% of the dollars)

For more fun with stats, and some color commentary, check out our press release.

Canadian investing, eh?

Think you might want to foray into Canadian investment? You’re not alone.

According to the CVCA (Canada’s Venture Capital & Private Equity Association ) cross-border investment is increasingly trendy. Non-Canadian investors represent 33% of venture investment in Canadian firms, and foreign investment in Canada is up 67% (Q32006 over Q32005).

At our last AoA Membership Luncheon, Devin Stockfish of K&L Gates gave our group some quick tips on investing in Canadian companies (timely, as one of our presenters was in fact Vancouver, BC-based). While this serial entrepreneur CEO had good traction and a compelling technology (and, as he pointed out, Canadians are just so darn nice), Devin provided some additional reasons we might want to consider cross-border investment.

• The “shred” program (SR&ED, Scientific Research and Experimental Development), providing investment tax credits to provide incentives for conducting research in Canada

• IRAP (Industrial Research Assistance Program),provides business and technical services to growth-stage Canadian companies

However, he suggested investors consider the following nuances:

Canadian tax issues

• Differing treatment of dividends, interest and capital gains
• 116 clearance certificates , which become important with sale of shares
  
• US LLC treatment: treated as a corporation vs. a partnership

US tax issues

• Passive foreign investment company (PFIC) and Controlled Foreign Corporations (CFC):note special instructions from the IRS on taxation of profits

The take away was not to shy away cross-border investing, but to deal with these issues at the time of investment vs. at the liquidity event. The proper deal structure (and legal help) can prevent headaches. Other than that, when you visit the management team in Canada, remember your passport, and that it’s only an urban legend that Canadian beer is stronger.