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The value of the Super-Angels

Angel investing | The value of the Super-Angels Leslie Kossoff

Years ago, during the midst of the dotcom boom, I was sitting at breakfast at Buck’s, minding my own business and preparing for a meeting that I had later that morning. Buck’s is a restaurant in Woodside that is a popular hang with the venture set and was a veritable gathering place for everyone involved in tech ventures in the Silicon Valley. It still is.

And it happens to have great breakfasts.

On this particular morning, I found myself unavoidably eavesdropping on a conversation between two tech entrepreneurs at the table next to me. In fact, they were arguing, passionately, about the value of a particular angel investor that wanted in on one of their companies. The angel had been bothering the target’s friend because the entrepreneur in question wouldn’t return his calls.

His reason? That angel’s money was “too expensive.” As he angrily explained, he had learned his lesson from when he had let the angel in before. Because of that, he knew that the time he would spend holding the angel’s hand and making him feel good about the investment would constantly take him away from the success he was trying to create. As far as he was concerned, while his company could use the money, it wasn’t worth it. Not from that investor.

Fast forward to today and enter the super angels.

This is a whole new class of angel investors who are more sophisticated, experienced – and organized – than their predecessors.

While the original angels were individuals who would simply bring money, this new breed – many of whom are successful entrepreneurs themselves – bring the same type of understanding to the funds they are creating that the venture firms bring. Only at a much lower starting point.

The super angel funds – many of them investing as little as $25K – were early stage investors in companies such as Facebook, and Zynga. They’re putting money in where the venture firms are not – not least because the venture investors are looking for more guarantees than the super angels promise.

That’s because the super angels are willing to take risks on new ventures and technologies that their larger counterparts are not. Or can’t.

Think of it as micro-financing for the innovation set.

Because while, at the moment, the biggest growth of super angel firms is in the Silicon Valley, what’s important to note is they’re not limited to that geographical area. Nor to the technology space. That’s just the crew that’s getting the press.

So, whether you’re an individual investor who is looking for new investment opportunities, an entrepreneur looking for seed-funding or a major corporation that wants to make sure it’s on the cutting edge of new innovation, start doing your research on the super angels and their funds. Now.

Because the sooner you’re in, the more you’ll net – now and going forward.

For more insight from Leslie L. Kossoff, follow her blog, The Thinking Executive.

Tags: angel funds , angel investing , angel investors , Funding and Investment , super angels , venture firms
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