ACEF Newsletter - Assessing CEOs, Angel Group Models, Privacy

July 2010 -- Welcome to the twenty-second edition of the Angel Capital Education Foundation newsletter, reporting matters of interest to angel group leaders and others involved in angel investing with a special focus on best practices. Click on the titles below to read the full articles.

Evolving Models of Angel Groups
As an investment class, angel groups continue to proliferate, evolve, and mature. Growth, financial stability, and investment success are priorities. Groups train for deal leads, raise sidecar funds, seek earlier exits, contribute to broader support for entrepreneurship, and manage through up and down economies. Some group members pursue angel investing as a career.

Ask an Angel: How Does an Angel Group Effectively Assess Startup CEOs?
Angels know that the CEO is critical to the success of any startup company. ACEF asked Tom LeFevre, a twelve-year member of the Angels' Forum in Palo Alto, CA and co-founder of Intuit, to share his perspective on assessing startup CEOs.

Group Profile: ICE Angels
ICE Angels was founded in 2003 and is one of the first New Zealand angel groups. The group has more than ninety members and affiliates who have invested more than NZ$14 million (US$9.8 million) in forty-two investment rounds that totaled more than NZ$26 million (US$18 million). There are seventeen companies in ICE Angels' portfolio. In 2009 the Kiwis had a record year.

2010 Hans Severiens Award and Inaugural Luis Villalobos Award Announced
The Angel Capital Association and Angel Capital Education Foundation named John May-managing partner of the New Vantage Group, ACA co-founder and chair-emeritus, and active participant in five angel groups-as the recipient of the 2010 Hans Severiens Award. ACA also announced Modumetal of Seattle, WA, as inaugural winner of the Luis Villalobos Award.

Education Contributes to the Sustainability of Angel Groups
Continuing education and skills building contribute to stronger connections and relationships between members of angel groups while helping angel group members become better angel investors. Groups become better at conducting due diligence, understanding the concepts and approaches to term sheets, and leading the valuation process.

Privacy and Data Protection for Angel Groups
The same privacy protection and data security issues that affect individuals and companies create important considerations for angel groups. Collecting and storing only necessary private information, understanding providers' privacy policies, and granting access to information only on an as-needed basis are all good practices.

"Angel Amendment" Protects Efficient Capital Access for Entrepreneurs
In July, Congress approved the final Restoring American Financial Stability Act of 2010 (now called the Dodd-Frank Wall Street Reform and Consumer Protection Act) based on an important amendment in the Senate. The amendment, which was included in the House-Senate conference committee, will ensure that high growth entrepreneurs continue to have access to a strong pool of angel capital and that investors are better protected from fraud. The final bill had not been signed by the President as of the publication of this article.

2010 ACA Summit Held
The Angel Capital Association's annual Summit was held May 5 - 7 in San Francisco. More than 400 attended, the largest gathering of angel investing groups in the world. Presentation, panel discussion, and roundtable topics included syndication, working with venture capitalists, accelerated exits, trends in angel investing and group models.

Harvard-MIT Paper: Angels Improve Entrepreneurial Success
"The Consequences of Entrepreneurial Finance: A Regression Discontinuity Analysis," a working paper published by Harvard Business School (HBS) quantifies the positive impact of angel investors on the new ventures they fund. Overall, the study results suggest that investments by angels improve entrepreneurial success.

Interesting Events
Learn more about four conferences: Auto Venture Forum, National Angel Capital Organization Annual Summit, National Association of Seed and Venture Funds Conference, and Investors' Circle National Venture Fair and Symposium.