David Cohen – the ringleader of TechStars – has a good post up titled Thoughts from the west out east, and vice versa. Last week David was a guest speaker at the Northeast Regional Investor Conference held in Portsmouth, NH. In addition to running TechStars, David is an active angel investor in Colorado and had a very interesting reaction to the way “better angel groups – both east and west coast – worked.”
“One thing that I heard repeatedly today from the better angel groups (east and west) is that every single deal that is presented to their group is sponsored by one of their members. That member introduces the deal before the pitch. I got to see 3 “quick pitch” deals today and they were all high in quality. They were effectively introduced by the sponsor angel. If the deals weren’t good, that angel would look bad for bringing the deal to the group. Social pressure was at work naturally and effectively because of this simple rule. No screening committees, application fees, etc. Just go impress a member angel. We should be able to learn from these best practices in Colorado, but we haven’t. Both Kieretsu and CTEK require applications, payment of fees, and artificial screening processes. Just make them get to and impress an active angel who is a respected member of the group. Much cheaper, no fees required, and good dealflow. If they can’t find and impress just one angel enough to get there, there’s a 99% chance they shouldn’t be there anyway. I continue to hope we see this sort of model adopted with Colorado’s angel groups. It’s certainly the way many of the very high quality angel deals get done outside of those groups already.”
Read the rest of the post for what David found offensive and then – on second thought realized was correct.
