Expanding Our Geographic Reach to Focus on High-Impact Investments

The Impact Angel Group’s definition of “impact” has been evolving over time in order to make the most needed and efficient impact possible. For the last year, we concentrated on investing in Colorado-based companies, but we have recently decided to widen our focus. 

Why did we focus exclusively on Colorado? Two reasons:

1) Colorado needed a jumpstart. The Colorado angel community took a big hit after 2008. We believed we could make the greatest impact by improving our entrepreneurial ecosystem: recruiting more local angel investors and supporting local companies.  

2) We were new. Because we became a formal membership organization just this past August, we were better known here locally than we were nationally. Most of the investment opportunities we reviewed were Colorado companies referred by Colorado angel investors.

In order to diversify our risk, we aim to invest in 10 companies per year. However, we’ve found it’s not possible to find 10 Colorado companies that meet our impact and return criteria. We feel very strongly that sacrificing returns for impact will have a long-term detrimental effect on the impact investing industry. If we stay focused on Colorado and invest in 10 companies annually, we believe we will have to sacrifice a return for impact.

Additionally,

1) The Colorado angel capital community is much stronger. Because of the work the Impact Angel Group and others have been doing, we have more active local angel investors. Thus, raising local angel capital is not as difficult. Also, many organizations are working on this issue to ensure continued improvement.

2) We have a much stronger national network of angel investors and entrepreneurs. Because our organization is more mature, we receive qualified referrals from outside the state of Colorado from our members, and the dozens of national angel investors and networks with which we’ve built relationships.

For these reasons, we’ve decided to become more diligent about our focus on impact by expanding our investment criteria to consider companies outside the state of Colorado. Below is our revised definition of “impact”.

If you have any questions or comments about our new investment criteria, we’d love to hear them. Please leave a comment below.

Our Definition of “Impact”

The Impact Angel Group is an angel investment group equally dedicated to making a difference and realizing a return. We make an impact by investing in companies that have the potential to make a significant social and/or environmental impact and produce a venture return.

How do we make an impact?

We invest in early-stage companies. 
We invest in entrepreneurs because enabling people to make a living doing something they are incredibly passionate about is an important impact. Investing in innovation and passion builds strong communities and empowers exceptional, motivated people to truly change the world.

We invest for venture returnsAngel investments are extremely risky. We need to see the  potential for a significant return to outweigh our risk. Additionally:

  • Thriving companies can create more impact.
  • Proving it’s possible to make a difference and make money is a powerful motivator for change.
  • If we invest well, we can reinvest our returns for more impact.

We invest for venture-scale impact. We invest in companies that will be able to scale their impact beyond their local community to improve our overall environment and/or the lives of at least a million (ideally a billion) people.

How do we define impact investing?
We use the GIIN (Global Impact Investing Network) definition: “Impact investing aims to solve social or environmental challenges while generating financial profit.”

Also, the World Economic Forum definition: “Impact investing is an investment approach that intentionally seeks to create both financial return and positive social or environmental impact that is actively measured.”

These definitions are very broad. Arguably, every company creating jobs is addressing a “social challenge”. In many ways, impact is in the eye of the beholder. However, the intentionality and the measurement of impact separates impact investors. We filter opportunities based on their ability to be financially successful and use an impact assessment and a committee approach to determine whether the company meets our venture-scale impact criteria. Our role as an angel group is to assess the impact of the investment and share that information with our members so they can make informed decisions.

How do we assess the impact of our investments?
Companies can make an impact in many ways beyond the products and services they provide. We use the B Impact Assessment Framework to assess the impact that companies have on their local communities, environments, employees, suppliers and other stakeholders. We also ask prospective investments to complete a short questionnaire about their business model and local community impact. If we invest, we require our portfolio companies to complete the full B Impact Assessment five years after the investment is made.

How are we different from non-impact focused angel groups?
Our difference is defined by intention, information and understanding. We provide an impact analysis to help our members make informed decisions and we offer ongoing impact investing education. Further, by publicly stating that we care about more than the financial return of our investments, we hope to encourage entrepreneurs and investors to be mindful of the impact they are making.

What do you think? We welcome questions or comments about our new investment criteria. Please leave a comment below.

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The Importance of Asking Before Making an Intro to an Angel Investor

When I first started angel investing, John Ives from Tahoma Ventures took the time to meet me for coffee to welcome me into the angel community. He spent over an hour with me to kindly answer my newbie angel questions and to make sure I was someone he would feel comfortable sharing investment opportunities and introductions with. At the end of our meeting he said, “I know a few people you might enjoy meeting, but I need to reach out to them to ask them if they are open to an introduction. Also, as just an FYI, it’s really good practice to ask before you make an introduction to other angel investors.” Continue reading

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9 Angel Investing Resources – Courtesy of Boulder Startup Week

Over the past two days, I’ve had the privilege to speak at two Boulder Startup Week events with an all-star lineup of startup community thought leaders: Brad Bernthal, Seth Levine, Claudia Batten, Todd Vernon, Morris Wheeler, Ari Newman, Sue Heilbronner and Robert Fenwick-Smith. You can read a recap of our first BSW event here and below is a list of the resources this lineup recommended for angel investors and entrepreneurs raising angel capital. We thought it might be helpful to pass along. Enjoy! Continue reading

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How to Actually Integrate Impact into the Portfolio – 5/21 in Boulder

There has been a lot of talk about the definition and theory of impact investing, but how does one actually become an impact investor? Join us in Boulder on 5/21 to find out!!

Click here to REGISTER
For blog readers, use the code TIAG35 for a $90 discount. Impact Angel Members – check your last member email for your special code.

When? Wednesday, 5/21 from noon to 1:30 pm
Where? Downtown Boulder
Details? Details and Registration Link Continue reading

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Mother’s Day | Save Two Women – Support a Startup – Order by Tonight

Looking for a last minute gift for Mother’s Day? These super cute purses sold by Fort Collins, Colorado-based ayzh, will save two lives, support a local startup and look great on mom. Should be a no-brainer. Order by tonight to make sure it arrives in time for Mother’s Day! Continue reading

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Funding Your Dream | 5 Tips for Entrepreneurs

Today we have a guest post from one of our favorite entrepreneurs, Leslie Kimerling, co-founder and CEO of Double Helix LLC, a nano-optics company bringing 3D and super-resolution imaging technologies to the bioscience and advanced industries markets. Leslie attended a recent panel moderated by Elizabeth Kraus, the managing director of the Impact Angel Group, and has recounted her experience. 

I recently found my way to the second annual WILD Summit.  WILD is an initiative of the Women’s Council at CU’s Leeds School of Business.  The WILD Summit is an annual event designed to provide a professional forum for women as they say in their mission statement “who want to learn and share; inspire and be inspired.” Continue reading

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A Taste of Humble Pie from My Meeting with Tajikistan Entrepreneurs

An important part of the Impact Angel Group’s mission is to strengthen our startup community and entrepreneurial ecosystem, so we often participate in community building events. This event was particularly interesting, so I thought it might be helpful to share my experience:

I was recently invited to meet with a group of female entrepreneurs from Tajikistan who were visiting Boulder. Dushanbe, the capital of Tajikistan, is Boulder’s sister city (hence the Dushanbe Tea House) and in an effort to “to enhance mutual understanding and cooperation between Eurasian and American leaders”, a group of Tajik entrepreneurs come to Boulder each year. I was invited to attend the meeting to help shed light on Boulder’s “secret sauce” to help the entrepreneurs better understand how to build a successful startup community. In the process however, I realized they had a lot more to teach me than I could ever teach them. Continue reading

Posted in Colorado Angel Investors, Social Impact Investing | Tagged , | 4 Comments

Learn to Be an Angel Investor on 4/8

With a new startup forming every 72 hours in the Boulder/Denver area, more and more individuals are trying their hand at “angel investing“.

Angel investors, or individual investors who invest their own money into businesses that are generally too early-stage to secure a bank loan or venture capital, play an important role in our community.

Join us for an angel investing crash course!

Investing in Startups | The Basics of Angel Investing

Date: Tuesday, April 8th
Time: 11:00 am – 12:30 pm
Location: First Western Trust Bank in Boulder
REGISTER

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Angel Investors’ Investment Criteria | The Gold Standard

Entrepreneurs and angel investors often ask me: What kinds of companies do angel investors invest in?

Because angel investors are individuals and all individuals are different, it’s really hard to answer this question. However, from our experience reviewing over 1000 angel investment opportunities and meeting with nearly 500 angel investors, we can say that there is a list of criteria that most investors strive to meet. This doesn’t mean that angels won’t invest in companies that don’t meet all of these criteria, and many investors require additional criteria (i.e.: impact). Rather, this is simply a gold standard that most investors strive for.

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Should Women Be Insulted by Gender Lens Investing?

As we saw at our Impact in Angel Investor Decisions event recently, it seems as if every angel investing event I attend invokes a conversation about the need to support female entrepreneurs. In the past week, four people have asked me what they can do to help women entrepreneurs and angel investors. While these offers for support are certainly well-intentioned, I’m starting to wonder whether I should be insulted by this overwhelming urge to provide extra support to women through gender lens investing. Continue reading

Posted in Colorado Angel Investors, Colorado Impact Investments | 6 Comments