Boston’s Common Angels is Now A Fund: Converge

Interesting tweet I saw today.

I clicked over and read their blogpost.  Excerpting, but Common sees these factors as a reason to abandon their existing model and change.

  1. The early-stage investing landscape is flooded with crowdfunding platforms, incubators, accelerators, seed programs at VCs, angel groups, and others.
  2. The glamorization of start-ups (i.e. Shark Tank) have made entrepreneurs entertainment – catering towards “hot” industries.
  3. The influx of capital means entrepreneurs demand more from their investors.
  4. A 7-year bull market makes everyone feel like a winner. Not enough new investors have lost money yet. Investing looks easy right now.
  5. Fundraising is a more time-consuming and opaque process now – it is harder to suss-out who is a real check-writer.

They also stress that their is the entrepreneur, and they want the entrepreneur at the center of the process.  The entrepreneur is the most important.  Great startup communities are built and lead by entrepreneurs.  They are not lead by government, people that write checks, or service providers.

Angel groups can certainly be messy.  Free markets are messy.  The extent of the messiness is all about the principles that are embedded into their processes.  But, even in a crowdfunding, bull market environment, I think there is room for angel groups.

Would be interesting to see how the carry is distributed in their new structure, and if there is a management fee.

Harper Reed once asked me what I thought of crowdfunding.  I said I was a huge fan.  To compete, angel groups were going to have to step up their game.  In general, competition is good.  Competition is also a much better regulator than any government agency.

What do you think?