The Impact Angel Group | 2012 Impact Investing Progress Report

With less than 4 hours until 2013, I thought it would make sense to reflect on the first year of Impact Angel Group existence. Since our inception 11 months ago, we’ve:

  1. Reviewed 502 executive summaries
  2. Met with 242 angel investors
  3. Made 5 impact angel investments
  4. Invested 300 hours of sweat equity in 3 additional impact startups
  5. Helped two promising investments avoid raising capital by recruiting executive talent to work for equity

And what have we learned from this? Here are our takeaways:

  1. Angel Investing is Time Consuming! – Deal Referrals are Key. I used to be annoyed with the fact that angel investing was such a close-knit clique, but now I get it. When we first started out, we cast a wide net and sifted through over 100 deals for every investment made. It was fascinating, but totally inefficient. Since then, we’ve starting focusing more on Colorado companies, so that’s helped, but the biggest time reduction has come from our focus on deals referred by our network of trusted investors. We’ve gone from about 100 to 1 to roughly 20 to 1. Maybe cliques aren’t so bad after all…..
  2. Working for equity is the best due diligence tool. The best way to see whether a company is a good investment is to go work for them or send someone you trust to work for them. You see things you’d never see as an investor, both good and bad, and it adds value to the company – a win, win.
  3. Structure your sweat equity wisely. Working for equity can be a great due diligence tool and way to add value to the company, but it can also be a huge time suck and really mess up the company’s cap table if you aren’t careful. Here are some suggestions on how to effectively work for equity. And here are a few other lessons we’ve already written about, but are worth a second look:
  4. It’s a terrible idea to brand yourself and your investments as “impact”. (Crazy coming from the Impact Angel Group, I know, but it’s true.)
  5. Access to capital is NOT the problem.
  6. Angels can’t do everything on their own. But MOST IMPORTANTLY:
  7. Innovate or die. We made some good progress for our first year, but transparently, our first year was mostly a learning process (especially regarding the fact that it’s a terrible idea to brand yourself and your investments as impact). Now, the question is…….Will we take what we’ve learned, innovate and come back stronger in 2013? I think so.

So what does this mean for the Impact Angel Group? We are exploring many options for 2013, but a major revamp is certainly on the horizon. Stay tuned to find out:

  1. Will the Impact Angel Group drop the “Impact”?
  2. With more and more angel groups forming in Colorado, should we continue to exist?
  3. How will we create real and positive Impact for 2013?

Subscribe to our blog to find out…and if you have any insight on these items, please leave a comment! Happy New Year!

This entry was posted in Colorado Angel Investors, Colorado Impact Investments, Social Impact Investing and tagged , , . Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *

Please prove that you\'re not a robot *