Ideas on paper

Thoughts by José Luis Agell

The rise of Angels

There’s being a general discussion out there about how the VC industry is changing , enabling the rise of Angels and Super Angels. The financial downturn has definitely forced a change of model. But there are other factors which are modifying the way start-ups are funded, especially in their early stages.

Naval Ravikant (entrepreneur, angel investor and co-author of Venture Hacks) explains this phenomenon very well in the following video.

And here are my notes:

  • The rise of Angels is an effect of the rise of power of Entrepreneurs,who have gained enormous amount of leverage due to:
  1. -Technology improvements (cloud-computing, social media, blogs, Adwords…).
  2. – Companies can be built as they grow.
  3. – Incubators have surged and are the new business schools. “Learning by doing”.
  • Entrepreneurs are demanding new rights (less control, more specific knowledge, cash upfront,…)
  • Lots of successful entrepreneurs are becoming Angels in order to capitalize their money, especially now that real state is not a business.
  • Financial effects: rounds are continuous, valuation prices change everyday, no round leads, no board seats.
  • VCs bring Money, Advise and Control.
  • Angels bring Money, sometimes Advise, no Control.
  • “Less meeting, more tweetting”. Broadcast (or multicast) your brand.
  • There are companies now who are financing themselves with Angels, from beginning to end.
  • Angels investments stay local. You want to know the entrepreneurs.
  • The smaller the startup, the smaller the Board should be. Early stage companies should have around 2 people in the Board.

Thanks Naval for sharing your insights!

4 responses to “The rise of Angels

  1. Guille September 21, 2010 at 6:38 am

    Pepe,
    Estás hecho un experto en el tema! Sin haber visto el vídeo (todavía) me parecen muy buenas tus notas.
    Suerte con los retos que vienen, a ver si se os aparece algún “Angel” de estos…!
    Un abrazo,
    Guille

  2. Pablo Moreno Galbis September 21, 2010 at 3:22 pm

    Mira este articulo de Techcrunch, muy interesante: http://techcrunch.com/2010/09/21/so-a-blogger-walks-into-a-bar/

  3. jlagell September 21, 2010 at 3:35 pm

    Muy interesante Pablo! Y muy intrigante!!🙂

  4. jlagell September 21, 2010 at 3:36 pm

    ¡Gracias Guille! ¡Mucha suerte también con vuestros emprendimientos que no son pocos!

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