Putting aside the impact for a moment… for early-stage impact investors, how can there be a reasonable return on investment if there are little to no 10x’s to be found? A bit of analysis and a surprising answers…
Less than 0.4% of American startups are funded by venture capitalists. We know this thanks to the measurement and reporting of the venture capital industry and the Kauffman Foundation. 2,000 companies were reported to receive their first round of venture capital, out of a bit more than 500,000 new companies created annually. (Both of these are U.S. statistics). Investments by Angel investors are...
Yesterday I attended and spoke at a great investor event set up by Element8, “Investing a World With Few Exits“. The event kicked off with an amazing summary by Rob Wiltbank, which not only reprised his conclusions from his groundbreaking research on Angel investing, but included analysis on new data sets he has been collecting. The key learning continues to hold true. In the...
Nearly two years after Washington D.C. passed the JOBS Act, which legalized crowdfunding of startup fund raising, the law goes unused, awaiting a final set of regulations from the SEC. With no end to that process in sight, we here in Washington State took matters into our own hands, and last month passed the Washington Jobs Act, an intrastate crowdfunding law. This law will allow any Washington...
A rationale for Revenue Based Investing by David Bangs, guest contributor and impact Angel investor For many years I have been doing carefully considered angel investments in companies I find interesting. Some of the invested companies have failed while others are thriving. However, none of these companies have been sold or gone public, producing the desired return on investment. I am not alone...
You have an impactful startup. You are looking for help, and looking for investors. Where do you find the people, programs, and funds to help? The team at Fledge, the “conscious company” accelerator, has published a list of incubators, accelerators, competitions, funds, and crowdfunding sites. This Google Doc is viewable by anyone, and is periodically updated. If you have a impact...
(UPDATE 3/8: Seattle Times story ) (UPDATE 3/7: IT PASSED! A big thank you to everyone who helped move the Senate, and a huge thank you to Representative Cyrus Habib, who made this bill happen, and to startup attorney Joe Wallin, who inspired it into being.) (UPDATE 3/7: The bill is on the Senate’s “Order for Consideration”, which should see a vote within the next hour. You...
Most people follow a century-old paradigm of philanthropy, popularized by Andrew Carnegie back at the turn of the 20th Century. Simply put, maximize the return of investments, and give a portion of those earning to charity. In Carnegie’s case, those investments provided him so much wealth, that despite giving away an equivalent of $5 billion in his two decades as philanthropist, enough of his...
Continuing the discussion of early-stage investing, a common thought circling around the venture capital community is that their the traditional investment model is broken. In “Investing without Zombies”, I focused on the odd choice of optimizing the system for the least likely case. But there is a second flaw in that system as well. Exits. Traditional equity investments are worthless until a...
Income inequality has finally floated to the surface of the news. It’s nice to see this issue being talked about, but much of what I’m seeing is focused on the symptoms, with solutions like “just pay the workers more”. What I’d prefer are some opinions on the root causes, purposefully plural as this is not a simple issue. I believe I have uncovered one such hidden cause. It lies down in the...
