Company News

  • Distinguished investor, strategic consultant, and former Wall Street analyst Whitney Johnson has joined the Launch Angels Investment Committee team for its Women-Led and Early Traction Funds.

    Leading Financial Analyst Whitney Johnson Joins Launch Angels Investment Committee

    Boston, MA, April 1, 2014 — Distinguished investor, strategic consultant, and former Wall Street analyst Whitney Johnson has joined the Launch Angels Investment Committee team for its Women-Led and Early Traction Funds. As co-founder and former president of Clayton Christensen’s investment firm Rose Park Advisors, Johnson brings Launch Angels her insights into disruptive innovation and start-up valuation. Launch Angels, an investment platform focused on equity crowdfunding investments, is already actively raising capital for these two funds. Shereen Shermak, CEO of Launch Angels, welcomed the addition of Johnson’s expertise. “Whitney is an experienced, astute analyst. Her decision to join our Investment Committee is a boon to investors. It’s also a singular compliment, given Whitney’s ability to identify powerful disruptions like the one Launch Angels brings to equity investing.” Johnson concurred with Shermak’s thoughts. “Launch Angels is an excellent fit for my interest in disruptive investment trends and innovative startups.” Johnson began her career on Wall Street working as a secretary, while studying business in the evening. She rose to investment banking and research roles at Salomon Smith Barney and Merrill Lynch. Johnson’s financial acumen was recognized when she was rated by Starmine as a superior stock picker compared to peers and became an Institutional Investor all-star—an honor repeated for eight consecutive years. Today, Johnson is a widely recognized thought leader and strategic consultant on disruptive innovation, women in business, start-up investing, and more. She is a regular blogger for the Harvard Business Review, as well as author of Dare, Dream, Do: Remarkable Thinks Happen When You Dare to Dream. Shermak noted that with the opening of the Launch Angels Women-Led Fund, Johnson’s presence is timely. “We’ve seen great interest from investors who believe as we do that there’s huge opportunity in women-led and -focused startups. Businesswomen like Whitney amply demonstrate that.”

    Investment Risks

    Investors should consult with their financial and tax advisors before considering an investment. Early stage companies are risky investments, not suitable for all investors—even accredited ones.

    About Launch Angels

    Launch Angels is a new investment platform that creates early stage VC portfolios leveraging equity crowdfunding. Launch Angels pools money from accredited individuals to create venture funds that are invested across 8-12 deals. Investors enjoy the benefits of venture investing, without the hassle of research, paperwork, and tracking.
  • Over my years as an angel, I have seen new options emerge that supposedly solve key frustrations with angel investing. Those frustrations include poor reporting, heavy paperwork, and the time, time, time spent finding companies that might be a fit, diligencing, and tracking performance. But many options solve very little. For example, angel networks are terrific at getting people with capital together, but can be challenging for those with limited time. Online syndicates are cutting edge. But is this a solution for getting into the best deals that (fill in the blank with your favorite VC here) invests in? There is no good alternative for groups that want to invest together online, easily assembling the portfolio they’d like. Enter Launch Angels. I like building solutions for the problems of smart, busy people who want to fund entrepreneurs, but can’t find the time. Or people who have talked about investing together, but don’t have the expertise or platform to get the ball rolling. Here are the worst angel investing problems that I have seen, and what Launch Angels specifically does to resolve them:
    • Deal flow. If you’re not a professional investor, or just starting out as an angel, finding deals on a par with the one that inspired you to be an angel—tough to do right out of the gate. At Launch Angels, we find deals for you, leveraging crowdfunding portals and our networks to offer many options.
    • Transparency or ‘the Black Hole’, as we like to call it. Are you able to track that fourth angel deal the way you did your first? Didn’t think so. We created a simple login, where investors can pick up their monthly statement online and see what’s happening in their LA fund.
    • Diligence. How many deals can you review in a week? Part of one? It’s tough to work in quality due diligence with so many other demands on your time. And when you reach the point of final selection, don’t you wish you had four friends with decades of early stage experience backing your call? At Launch Angels, we field incredible talent that helps select deals to diligence, as well as consult on deal selection and amounts to be invested.
    • Structure. Maybe you’ve discussed with friends, family, classmates, or co-workers how great it would be to get together and support new ventures for groups or causes that excite you. But those discussions never seem to go anywhere. Launch Angels provides a structure and cadence for investing that helps your group take your ideas live.
    At Launch Angels, we listen closely to the market to determine where the pain is. Then we work every day to make your investing life easier and more rewarding. Bring us your thoughts. We’re here to listen and make your ideas happen.

     -Shereen Shermak, CEO

  • Everything you need to know about Launch Angels including the latest news, events and insights surrounding equity crowdfunding. This month we summarize our Women and Capital event, announce the next Angel Investor Lunch in NYC, and recap some of the great events Launch Angels has spoken at this month.

    Finding the Bright Spots: Women and Capital

    Thank you to everyone who joined us for our event, 'Finding the Bright Spots: Women & Capital' on March 4th. The evening certainly lived up to its billing with more than 70 of Boston's brightest angels and entrepreneurs in attendance for a presentation by Michelle Watson, CIO of First Republic Investment Management, and follow-on discussion moderated by Kara Miller, executive editor at NPR and host of Innovation Hub. For those who missed the event or want to learn more about how we can level the playing field for women entrepreneurs, visit the event page. The evening also marked the first official announcement of the Launch Angels Women-Led Fund, a venture fund created to support companies that are lead by women, financially backed by women, or are otherwise women-friendly in their management practices or product offerings. If you would like to learn more about the Women-Led Fund, please send us an email.

    News and Events

    NYC Women-Led Fund Lunch in Two Weeks

    Curious to find out more about our funds? Join us for a private lunch in midtown the week of March 31. We’ll bring the food, you bring your questions about angel investing. We will also introduce you to Launch Angels’ open investment process and action-oriented approach. Email us for an invitation.

    Innovation and Equity Crowdfunding

    Launch Angels Associate Mandie Holmes spoke at the 128 Innovation Capital meeting on March 13th. The talk called, 'Equity Crowdfunding -- A new approach for investors and entrepreneurs', focused on how equity crowdfunding can help alleviate the funding gap for early stage startups and what investors look for when evaluating companies that raise money through equity crowdfunding. 128 Innovation Capital Group is a Boston-area forum for investors and entrepreneurs to learn, network, and share ideas.

    SheEO to SheEO

    On February 26th, Shereen Shermak gave the keynote address at the SheEO Group Lunch meeting. The topic: What’s working for women entrepreneurs seeking equity and investors seeking equity positions. SheEO is a private group for women founders of high growth start-ups in the Boston area who are looking to share knowledge about their experience.

    Equity Crowdfunding Jam

    On February 20th, Launch Angels hosted a webinar through the 85 Broads Jam Session titled “What You Need to Know About Equity Crowdfunding.” In it Shereen Shermak explained what equity crowdfunding is, how it works, and who’s participating — as well as benefits to women. Jam Sessions are one-hour live webinars for members of 85 Broads, a global network for high-achieving women who invest in each other’s success.


    Industry News

    Although winter is winding down here in New England there's still a bit of cabin fever in the air. So here's some globe-trotting industry news to get you going.

    Just South of Pirate Sea

    As explorers in the startup and tech world, we love to see the opportunities imaginatively laid out in front of us. This map depicts Internet companies as physical territories. Read More

    ... And North of Main Street

    CircleUp makes a compelling argument for traveling outside VC firms and their tech sphere for equity investments. Just one persuasive fact: “While it’s sexy for VC firms to say ‘we only invest into billion dollar companies’, the reality is they are wrong 99.93% of the time.” Read More

    The Silken Road

    The CMO of Kiwi equity crowdfunding platform Seedrs says that the benefits of this new model go beyond increased access to investors. A “faster, easier and cleaner” process is a big carrot for promising startups. Read More

    Take Two From Down Under

    Eight years on, the CEO of Australian equity crowdfunding platform ASSOB explains how this granddaddy has flourished—even working with unaccredited investors. Read More

  • The Boston-born PayPal StartTank company Launch Angels has serious plans to shake up "Old World" investment practices with its equity crowdfunding-focused model. And as of Tuesday, the startup has proof of those plans in action. Launch Angels, which focuses on creating funds for affiliated groups of angels, announced that the WHERE Angels Fund inked its initial investment – and has another three deals on the way. “Crowdfunding is really having an effect on the venture capital space, specifically. For certain sizes of raises and for certain companies that don’t fit the stereotypical mold, it’s been a really good point of access to just get ideas out there,” Shereen Shermak, Launch Angels founder and CEO, told BostInno. The recipient of the WAF’s first investment, Klymit, proves Shermak’s point. Based in Ogden, Utah, the company is best known for its use of NobleTek™ argon gas insulation in outdoor gear and apparel. Klymit led a successful Kickstarter back in the fall of 2012, beating their fundraising goal and landing more than $50,000 for their technology.
    This excerpt is taken from the article 'Launch Angels Signs First Deal, Names Impressive Investment Committee'. To read the full text of the article, please visit BostInno.
  • The inaugural fund from Launch Angels announced the initial investment for its $1MM Where Angel Fund, as well as Investment Committee members selecting the portfolio.

    LA Announces First Investment and Committee for First Fund

    Boston, MA, March 18, 2014 — The inaugural fund from Launch Angels, an investment platform focused on creating venture capital funds for affiliated groups, is already actively choosing deals. Today the Company announced the initial investment for its Where Angels Fund (WAF), as well as Investment Committee members selecting the portfolio. Launch Angels closed the WAF in December 2013 at nearly $1 million. Investors are associates from the former Where, Inc. (acq.: PayPal, 2011) and their close networks. The first WAF investment was in Klymit, a provider of premium outdoor equipment. Launch Angels, which is savvy about leveraging equity crowdfunding as part of its deal pipeline, took part in the Series B equity round offered through crowdfunding site CircleUp. Another three WAF deals are being finalized, balancing the portfolio between high-tech and high-touch startups. Launch Angels CEO Shermak commented, “This investment is a major milestone for the Company. Our process is turning up exciting deals, the committee is fully engaged, and the WAF investors are deeply interested. We originally projected investing the Fund over a period of 12-18 months. Given the deal flow we’re seeing, I suspect we might fully invest before then.” Klymit was picked by the WAF Investment Committee, consisting of leading New England entrepreneurs. Shermak runs the committee. With deep experience in the alternative fund world, angel investing, and startups, she is well acquainted with early stage investment. Other committee members include long-time entrepreneurs, such as Big Idea Group CEO Michael Collins, Bin1 ATE CEO George d’Arbeloff, startup advisor Sandy Posa, and Merchant Media CEO Michael Antino. The committee also features experienced financial advisors and investment managers. They include Baldwin & Clarke Corporate Finance Managing Director William Conrad, investment management veteran Kevin McClintock, and royalty-based venture finance expert Arthur Fox. Even as the WAF deal selection starts, two more Launch Angel Funds are accepting investors. The Early Traction Fund seeks early stage companies with a revenue track record. The Women-Led Fund targets women-led, women-backed, and women-focused companies. Both are open to accredited investors looking to diversify risk by participating in early stage venture deals.

    Investment Risks

    Investors should consult with their financial and tax advisors before considering an investment. Early stage companies are risky investments, not suitable for all investors—even accredited ones.

    About Launch Angels

    Launch Angels is a new investment platform that creates early stage VC portfolios leveraging equity crowdfunding. Launch Angels pools money from accredited individuals to create venture funds that are invested across 8-12 deals. Investors enjoy the benefits of venture investing, without the hassle of research, paperwork, and tracking.
  • How Women Are Succeeding with Crowdfunding, Angel Investing and Venture Capital

    Sponsored by Launch Angels and PayPal. Join women interested in making the best possible use of their capital while investing in women-led businesses. Our lively, informative event features a panel discussion on how women entrepreneurs and investors are finding the “bright spots” in equity. We conclude with wine, dumplings and networking. Men definitely welcome! Seating is limited, so please RSVP now. Moderated by Kara Miller, host and executive editor of “Innovation Hub,” which airs on 89.7 WGBH, and SiriusXM. Keynote address by Michelle Watson, CIO of First Republic Investment Management. Panelists include Daily Grommet CEO Jules Pieri, Techstars Managing Director Katie Rae, and ClearSky Data CEO Ellen Rubin.   Register Now
  • Between closing our first fund, spreading the word about equity crowdfunding and all the great press we've received, winter has been a busy time for everyone. Here's a short summary of what we have been up to.

    News and Events

    One of 10 Startups to Watch

    …So said the Boston Business Journal, and we won't argue. Kyle Alspach, Technology Editor, picked candidates based on “their innovative idea or product, ability to quickly raise funding or their experienced founder (and possibly all of the above.)” Read more...

    LA Judges Social Entrepreneurship Startup Competition

    LA was honored to participate in Make Impact NYC 2014 - Do Good In Your Hood!, a conference focused on bringing together entrepreneurs and leaders seeking to harness the power of social enterprise.. LA Analyst Mandie Holmes judged the 'Battle of the Boros' Pitch Competition that served as the capstone event of the conference. More than $20K was awarded to entrepreneurs who are making an impact through great business plans anchored with a social mission. The event took place Jan. 16 in New York City. Read more...

    Lunch & Learn with LA

    We kick off our Lunch & Learn series with a Jan. 22 event in New York City. These events give prospective investors insights into equity crowdfunding, venture investing, and our funds. If you’d care to join us or suggest a lunch in your area, email info@launch-angels.com.

    New Strategies for Funding Woman-Led Businesses. Join us for an event on March 4

    Equity crowdfunding is changing the gender equation in venture investing, opening up new avenues for female entrepreneurs and angels. LA will be hosting a high-energy, stimulating event the evening of March 4 in Boston to explore and discuss those changes. Gents definitely invited! Stay tuned for details. Tweet us if you want an invite.


    Industry News

    With the start of the new year, we’ll join the crowd in glancing backwards and forwards to assess the status of our industry.

    Checking the Rearview

    Consolidation, the angel bandwagon, and equity crowdfunding big bangs. An industry analyst reality checks 2013 predictions for crowdfunding. Read more...

    It’s Coming... Maybe

    “If we get our act together…2014 can be the year equity crowdfunding arrives in big way.” Read more...

    Buckle in for a Wild Ride

    Alt finance takes hold, new funding models appear, and enterprise players step up. “10 bold predictions for crowdfunding.” Read more...

    The Billion-Banner Year

    This analyst projects 2014 will see up to $1 billion in equity crowdfunding. Further, he says that if the full JOBS Act is passed, “ECF will become the predominate method entrepreneurs use to raise capital.” Read more...

    All Boats Will/Should Rise

    The article title trumpets “predictions.” But it’s equally a prescription list for making equity crowdfunding an opportunity for everyone from service companies to communities. Read more...
  • As we start to invest our first fund, I find myself considering what really makes a great entrepreneur.  What experiences and life events lead someone to create a business and invest in their own ideas? Here are some common threads I have observed after interacting with entrepreneurs for over 40 years:
    1. In the genes. What do the Sainsburys (groceries), Rothschilds (banking), Oppenheimers (DeBeers), Johnsons (Fidelity), and Fords (autos) have in common? Those are just a few examples of the fact that entrepreneurs sometimes come from a family of entrepreneurs. On a less lofty level, it’s clear why many entrepreneurs trace their roots to parents who opened up that first drug store or cafe. Seeing the fruits of your parents’ labor directly lead to your own college education is a powerful experience.
    2. Early obstacles. Many entrepreneurs have had to overcome significant problems at a young age.  A common theme in entrepreneurs’ stories is those who have limited means often have unlimited imagination. Dyslexics such as Charles Schwab and Richard Branson (Virgin) are known for their creativity. Others faced economic constraint. Howard Schultz (Starbucks) was raised in the Brooklyn projects. I grew up watching Oprah in her first big news role; she wore potato sack dresses as a child. Still others faced parental opposition, like Larry Ellison of Oracle who was told by his stepfather that he would never amount to anything. Unable to approach problems the same way as others, they invented new solutions.
    3. Education outside the box. Most entrepreneurs will never set foot on the Harvard campus (or they’ll exit early). They may forego formalized education altogether. And they don’t need it. Being part of a system isn’t what generates creativity and self-sufficiency; figuring out how to navigate a system without traditional credentials does. Everyone knows the dropout stories of Apple’s Steve Jobs and Microsoft’s Bill Gates. But the same applies to director James Cameron, entertainer Lady Gaga, Facebook’s Mark Zuckerberg, and casino magnet Kirk Kerkorian.
    4. Techie genius doesn’t equal CEO. Great entrepreneurs and great coders aren't necessarily the same thing. I also think this depends on approach. A coder looking to solve problems might make a terrific founder, while one who does it for the beauty of elegant code might not. Sure, if an idea requires excellent software or technical innovation, an imaginative technical co-founder is a must. But the insightful engineers behind BASIC and Fortran did not have years of experience in BASIC and Fortran.
    At Launch Angels, we support entrepreneurship in all its forms. We’re strong proponents of crowdfunding because of its potential to ‘widen the net’ of entrepreneurs’ ideas. And we’re happy to find many managers via crowdfunding that fulfill or even expand our definition of great entrepreneurs.

     -Shereen Shermak, CEO

  • We’re pleased to announce the closure of the Where Angels Fund (WAF). This is our first fund, which was custom tailored for associates from Where, Inc., acquired by PayPal in 2011. Closing at nearly $1 million, the Fund will invest in early-stage companies with an emphasis on industries well known to the investors, including mobile and consumer Internet companies. Even as the WAF closes, Launch Angels is opening two other funds. The Early Traction Fund selects investments in early-stage companies with a revenue track record. The Women-Led Fund is targeting women-led or women-focused companies. Both Funds are open to accredited investors looking to invest $50,000-$250,000. Interested investors can contact us at info@launch-angels.com. For more on the closing of the first fund, read the Dec. 23 Boston Globe article and the Jan. 6 coverage in the Boston Business Journal.
  • Innovative venture investment platform Launch Angels to manage private fund formed by an employee group from Where, Inc.


    Launch Angels, a new investment platform focused on equity crowdfunding deals, announced the close of its first venture fund, the Where Angels Fund (WAF). Investors in WAF are associates from Where, Inc., which was acquired by PayPal in 2011. The Fund, closing at nearly $1 million, will invest in early-stage companies with special emphasis on industries known to investors such as mobile and consumer Internet companies. These investments will be augmented by Launch Angels' equity crowdfunding opportunities.

    "The Where Angels Fund empowers smart people looking for smart investments," said Michael Collins, Co-founder and Lead Manager of Launch Angels. "Launch Angels is a forward-looking investment vehicle for accredited investors interested in venture deals. We make the whole process easier and more secure by scouting and vetting deals, doing paperwork, and tracking portfolios."

    The WAF is the crystallization of interest in early-stage investing among some current and former Where, Inc., employees. Sarah Hodkinson, Director of Marketing & Sales Strategy, PayPal Media Network, is one WAF participant. She observed, "The notion of investing in early stage companies was exciting and attractive to me, but I didn't know where to begin. Launch Angels made the process easy to understand and navigate."

    Launch Angels CEO Shereen Shermak will head the WAF Investment Committee, bringing her considerable fund management and startup experience to bear as she guides investment selection. "We'll assemble a portfolio of up to a dozen deals over the next 12-18 months," said Shermak. "Some selections will be suggested by WAF investors. Others will emerge from Launch Angels' own prospecting and due diligence."

    Most of Launch Angels' funds are open to accredited investors. The Where Angels Fund is an example of a Bespoke Fund, which enables a group to pool their money in a private investment portfolio. As Shermak noted, "It's a great opportunity for friends and associates to venture invest together. They set the investment scope and Launch Angels does the rest."

    Even as the WAF closes, Launch Angels is securing commitments on its second and third funds, the Early Traction Fund and its Women-Led Fund. Both funds are open to any accredited investor.

    Investment Risks

    Investors should consult with their financial and tax advisors before considering an investment. Early-stage companies are risky investments, not suitable for all investors—even accredited ones.

    About Launch Angels

    Launch Angels (http://www.launch-angels.com) is a new investment platform focused on equity crowdfunding. Launch Angels pools money from accredited individuals to create Venture Funds that are invested across 8-12 equity crowdfunding deals. Launch Angels Fund participants enjoy the benefits of venture investing, minus the hassles of research, paperwork, and tracking. Launch Angels is the smartest way to build a venture portfolio.

  • Launch Angels, a new early-stage venture capital firm based in Boston, on Monday announced it has closed the first of a number of planned $1 million funds, with investments pooled from individuals associated with PayPal-acquired Where Inc.

    Launch Angels plans to invest the funding in startup deals sourced from equity crowdfunding sites. The initial fund — dubbed the Where Angels Fund — will be focused on backing mobile and consumer Internet companies, the firm said in a news release.

    PayPal acquired Where, a location-based mobile tech firm in Boston, in April 2011 for $135 million. The acquisition formed the basis for PayPal's Boston unit, known as the PayPal Media Network.

    Launch Angels said it's now securing commitments on its second and third funds — the Early Traction Fund and Women-Led Fund.


    This excerpt is taken from the article 'Launch Angels closes first $1M fund; two more in the works'. To read the full text of the article, please visit Boston Business Journal.
  • There's a new band of angels in town. Veterans of the mobile marketing startup Where -- acquired by PayPal for about $135 million two years ago -- are getting together to make investments in startups via the new Where Angel Fund. It'll be up and running next month, with a goal of making 10 or 12 early investments over the next 12 to 18 months, says David Chang, Where's former VP of product and now head of the Boston office of PayPal. The fund will make investments of $50,000 to $75,000, and focus on areas like mobile apps, adtech, consumer technologies, and digital media. The fund will be operated using a new equity crowdfunding platform called Launch Angels, run by Shereen Shermak -- who happens to be married to Chang. Shermak was previously the co-founder of BuysideFX, a foreign exchange trading startup.
    This excerpt is taken from the article 'Veterans of Where, mobile startup acquired by PayPal, starting angel fund'. To read the full text of the article, please visit Boston Globe.
  • Brightcove founder Jeremy Allaire and Gemvara founder Matt Lauzon were among those who launched new startups in Boston this year, while Mark Cuban is among the investors who backed a brand-new Boston startup in 2013.

    Of the Boston-area startups which were founded this year, a few stood out to me for their innovative idea or product, ability to quickly raise funding or their experienced founder (and possibly all of the above).

    Here are 10 which caught my eye and are worth watching in 2014.


    This excerpt is taken from the article '10 Boston startups to watch who launched in 2013'. To read the full text of the article, please visit Boston Business Journal.
  • Here's a short summary of what we here at Launch Angels have been up to, plus news and events regarding equity crowdfunding and the startup space.

    News

    Future Forward Appearance

    On Nov. 19, CEO Shereen Shermak participated in the Future Forward Boston event. The invitation-only event included 50 founders, investors, and C-level executives, discussing Technology, Leadership and Competitive Advantage. The format was a series of 10-minute briefings on significant changes, with Shereen covering equity crowdfunding.

    BRA Panel Participation

    The Boston Redevelopment Authority (BRA) hosted an Access to Capital Workshop on Nov. 22. CEO Shereen Shermak was on the panel advising entrepreneurs, startups, and small businesses about early stage capital sources. Shereen spoke about the promise of equity crowdfunding as an alternative to traditional financing, between debt and equity financing speakers. The helpful workshop materials can be found online.

    VentureFizz Shout-Out

    PayPal’s David Chang gave a shout-out to Launch Angels in a Nov. 4 VentureFizz article. Change noted, “ ‘I played with AngelList syndicates, but decided to use Launch Angels as a platform instead.’ ” Full disclosure: David is Shereen’s husband, but VERY independent-minded. Read the article here.

    Events

    Women's Fund Next For Launch Angels

    We’re pleased to announce that we have opened our next fund to investors. Our focus will be on women-led equity crowdfunding deals. We’ll select promising opportunities that meet our regular criteria, plus one or more of the following:
    1. Women-led. Companies with a strong female presence on the management team or Board, and/or a track record of promoting women.
    2. Women-backed. Companies that are backed by women’s capital, where women have a stake of 40% or more in the venture.
    3. Women-friendly. Companies that offer women-friendly products or services, or have especially female/family-friendly policies.
    For more information, please check here or send us an email.

    The Un-Event of the Season

    UnPitch Boston, a brilliant brainchild conceived by Boston’s tech/innovation community, is going to be the pitch party of the season. And Launch Angels is invited. The free event, scheduled for Dec. 11 in Boston, is a pitch contest open to 60 startups. Launch Angels will be one of the deal evaluators, along with some of Boston’s other leading VCs and angels. The contest was conceived as a response to a pricey paid event offered by an out-of-town group.

    Industry News

    Hellishly Hot Relationships?

    The risks of startups taking money from unsophisticated investors may produce the equivalent of the McDonald’s hot coffee lawsuit. And investor asset tests won’t put a lid on that risk, warns this WSJ contributor. Read more...

    “If Cuban invests, I’m in!”

    This humorous poke at the SEC’s crowdfunding rules proposes an alt version of regulations—including management teams that feature “at least two members who are old enough to drive.” Read more...

    A Bad Haircut

    Startup crowdfunding investors need to look not only at the present opportunity, but the risk of future equity dilution. Read more...

    Who Says It’s Grade A Prime?

    The commentator urges every would-be crowd investor to examine how well platforms vet their deals. Read more...

    Get in There and Play!

    A crowdfunding panelist argues that angels can be invaluable participants in crowdfunding and should "step up and show what they’ve got." Read more...

  • 10 December, 2013

    I know three companies that could have benefited from equity crowdfunding. How many do you know?

    When President Obama signed the JOBS Act, he said that it was a “potential game changer” for small businesses looking to grow. Reviewing my own history, I can tell you this isn’t just theory. I’ve worked for three startups that could have benefitted significantly from more funding avenues. While each approached managing growth and cash flows differently, all were heavily constricted by their ability to raise capital and had to curtail growth despite high demand for their products.

    My first example: I worked for a small batch food producer who wanted to grow without a small business loan. Each batch of product funded a slightly bigger batch in the following month. We sold every bottle we made and had to turn down some customers because we couldn’t meet demand. It was certainly motivating to sell out each month, but incredibly frustrating not to be able to grow as fast as we wanted to.

    I also moonlighted for a small business owner who ran a restaurant supply store, funded with the owner’s life savings. He managed the anxiety of investing his nest egg and having no alternative funding by putting the business on a bootstrap budget. Revenues grew more than 3x while I was there. But we were also plagued by empty shelves, delayed building wholesale operations, and lost out to better funded/stocked competitors because we couldn’t afford more inventory.

    Later I consulted for a SaaS startup raising capital from investors. The founders had the “right network” — a close knit but large group of wealthy family and friends who were a mix of active and interested first-time investors. But it was still a difficult process. After over a year of pitching, they only had checks for half the amount people had agreed to commit. They had to start making some hard decisions about staff and marketing dollars.

    Startups traditionally have had these avenues to raise capital: self-funding, family and friends, angels and venture capitalists, or banks. My first two companies lacked a network of deep-pocketed friends. My third company operated in the right space to be attractive to VCs, but the prospect of seeking venture capital was foreign and they didn’t know where to start. All three were terrified of bank loan collateral requirements. And so they had to make hard choices and refocus priorities based on cash flows limits instead of product demand.

    While all my former employers are doing well, access to equity crowdfunding could have been Obama’s promised “game changer” for them. Equity crowdfunding isn’t right for every business (see this interesting post from Seed Invest on the estimated costs of a crowdfunding campaign). But I can’t help imagining how much faster each could have grown if they had another method for raising the capital  they needed.

    - Mandie Holmes

    Launch Angels Analyst


    Mandie joined Launch Angels in October 2013, bringing experience in consumer products, eCommerce, and web development from a number of startups in the Boston area. She earned an MBA from the Simmons School of Management and a Bachelors from the Massachusetts Institute of Technology.
  • Equity crowdfunding is in its early stages, but even at this point you can glimpse the potential. And that potential includes promise for both women angels and women-led companies.


    THE EQUITY CROWDFUNDING EXPLOSION

    First, a definition. Equity crowdfunding is investing in early-stage companies through web platforms, typically receiving stock for your money. At this point, only accredited investors (high incomes or high net worth) can participate. However, regulations are still being defined that may loosen that restriction.

    Even under current restrictions, equity crowdfunding is rapidly growing. There are about 350 platforms in the US, with close to the same number around the rest of the world. According to GoGetFunding, among all the types of crowdfunding (including donation and loans), the equity crowdfunding segment grew the most from 2011-12—by an impressive 114%. And some projections show that $3-4 billion will be raised through equity crowdfunding in 2013. Just as tellingly, even as equity crowdfunding blossoms, venture firm investments are down.

    Equity crowdfunding is more than just a new way of raising money. It’s filling a hole in funding. You may have noticed ‘the gap’ in financing between friends and family investments and venture capitalists. Angels (wealthy individuals who invest their own money in startups) are in the same “neighborhood” of contribution as friends and family. But they are not generally accessible, with 70% of their deals done locally (Halo Report, Angel Resource Institute.).

    WOMEN-LED COMPANIES AND WOMEN ANGELS ON THE RISE

    Equity crowdfunding is democratizing funding in more ways than one, including opening doors for women. Some crowdfunding sites boast great statistics on women-led investing. At Indiegogo, 42% of successful campaigns were female-led. A majority of offerings on CircleUp are women-led deals. Women have also been serial backers more than men.

    Equity crowdfunding might be impacting angel investing as well. According to the Center for Venture Research, between 2011 and 2012 alone, the number of women angels increased by 80%: from 12% of investors to 22%. Part of this is likely attributable to the ability to identify deals online through crowdfunding sites.

    ON THE SIDE OF THE ANGELS

    I often hear women automatically dismiss themselves as potential angels. The reasons most commonly given:

    1. I don’t have the wealth to angel invest.
    2. I don’t have the time to angel invest.
    3. I don’t have the network to find the ‘good’ deals.

    Let’s look at the money issue first. Angel investments are risky, and should only be undertaken by those who can afford to lose the money invested. But it’s interesting to note that angel investment entry points can be as low as $5,000-10,000.

    As for the time and network issues, those are significant problems. In fact, those problems inspired the launch of my company, Launch Angels. We’re leveraging the power of equity crowdfunding to create personalized venture funds and a very transparent experience. Recognizing that equity portals often don’t perform thorough due diligence on deals they list and that good research requires on average at least 40 hours, we decided to assist would-be angels. We take on the research and paperwork burden for our investors, plus spread Fund investment dollars over more deals by pooling individuals’ money.

    We also afford investors themed choices. For example, in 2014 we will offer a fund that will invest in women-led and women-friendly businesses.

    Equity crowdfunding, angels, and women. It’s a timely mix and one that promises to remain fruitful well into the future.


    Versions of this article also appeared on Forbes and Women2.com.
  • Shereen Shermak, CEO of Launch Angels, will be participating in Unpitch Boston on December 11. Organized in conjunction with the New England Venture Capital Association, Unpitch Boston is a new event geared to connecting entrepreneurs with investors. No elevator pitches and no "demo day" presentations, and no event fees.  This is a chance to sit down with an angel investor or VC for lunch in a casual, no-pressure environment.
  • If you haven’t read Casey Ross’s story today about the business community’s impressions of Boston mayor-elect Marty Walsh, you should check it out. There are some very thoughtful comments from local business leaders in there. In fact, the team of reporters conducting interviews for the story came up with way too much to fit in a single article, so I figured I’d share some bonus material from the tech sector. I spoke with a half dozen tech entrepreneurs about their hopes for and expectations of the incoming Walsh administration, and picked up on two major themes (besides wanting better STEM education in city schools, which Launch Angels chief executive Shereen Shermak addressed in today’s paper): They want the new mayor to help keep office space affordable and to improve public transit in the Innovation District.
    This excerpt is taken from the article 'Tech entrepreneurs want Walsh to keep office space affordable, improve public transit'. To read the full text of the article, please visit Boston Globe.
  • Welcome to the Launch Angels' "Crowdfunding 101 for Women" Liveblogging event! We will be issuing up-to-the-minute coverage of our presentation, co-hosted by Paypal, in their downtown Boston offices at One International Place.
  • Launch Angels CEO Shereen Shermak will offer insights into equity investing with an after-work event on November 14 sponsored by the New England Venture Capital Association. Shereen will explore trends in equity crowdfunding and angel investing, explaining how Launch Angels provides an easy entry point into both. The event is scheduled for 6-8pm in Cambridge, MA. You can find more details and sign up for the event by clicking Here.
  • 15 October, 2013
    UPDATE 11.4.13: Crowdfunding 101 for Women is the topic of Launch Angels’ November 4 presentation, co-hosted by PayPal and 85 Broads. The cocktail event, from 5-7:30 pm at our downtown Boston offices at One International Place, will feature an intro to angel investing and equity crowdfunding from CEO Shereen Shermak. She’ll examine how women are increasingly participating in and benefitting from both these opportunities—and why that’s good news for the economy.  You can sign up for the event here: Event Signup
  • 15 October, 2013
    As Launch Angels’ CEO, I had to be sold on the business before I came on board. Here are some of the reasons I concluded this is a great business, and why you should, too:
    • First and foremost, a compelling product concept. Leveraging the changes in regulations provided by the JOBS Act, more accredited investors will have better options and transparency for investing in venture capital. Yet most investors find that researching the hundreds of options on equity crowdfunding sites is incredibly time consuming. Launch Angels does the work for you.
    • Support for promising entrepreneurs. I am a serial entrepreneur, and I know what it’s like to start a business from the ground up. Often deserving businesses have not had the broad access to capital that equity crowdfunding allows.
    • Economic growth through small businesses. Small businesses, on net, create most new jobs.  As we exit the recession, the best way to add robustness to the economy is to help small businesses with good ideas survive.
    • Diversity for my portfolio. If you are looking for venture capital opportunities and want a diversified outcome, take a look at our model and get more information.
    Please check out the rest of our site (launch-angels.com) to learn more about our funds and team! Shereen    
  • xconomy

    Crowdfunding for startups is starting to attract more professional investment managers.

    LaunchAngels, a Boston-based fund for individual investors, is seeking its first $1 million pool of cash to invest in early stage and growing companies.

    The company is a spinoff of Big Idea Group, a Bedford, NH-based business consulting firm. It’s being headed by CEO Shereen Shermak, who previously worked at finance startups BuysideFX and Currensee.

    LaunchAngels’ pitch goes like this: With the loosening of federal rules about publicly soliciting investment, there’s suddenly a flood of startups seeking financing online through websites like AngelList, MicroVentures, and FundersClub.

    Maybe too many. LaunchAngels promises to narrow that field by keeping tabs on the companies seeking money and selecting its favorites.


    This excerpt is taken from the article 'LaunchAngels Hopes to Consolidate Crowdfunding for Startup Investors'. To read the full text of the article, please visit Xconomy.
  • A new early-stage venture capital firm debuts in Boston this week, LaunchAngels, which plans to raise a series of $1 million funds from high net-worth investors and invest in startup deals sourced from equity crowdfunding sites.

    LaunchAngels' CEO is Shereen Shermak, who most recently co-founded local financial tech startup BuysideFX, and previously was a VP at State Street and Fidelity. Shermak is based at PayPal's StartTank startup incubator in Boston.

    The firm was founded by innovation-focused consulting firm Big Idea Group of Bedford, N.H., whose founder, Michael Collins, serves as lead manager of LaunchAngels. Two of Big Idea's executives, Beth Obermiller and James Gill, serve as managers for the firm.


    This excerpt is taken from the article 'New Boston VC firm LaunchAngels to raise series of $1M funds, invest via equity crowdfunding'. To read the full text of the article, please visit Boston Business Journal.
  • venturefizz_logo

    There were a lot of under-the-radar happenings this week in the Boston tech scene. Here are a few of the stories that you may have missed.

    Shereen Shermak's New Venture

    Shereen Shermak, a Boston angel investor (who also happens to be married to PayPal's David Chang, who we wrote about earlier this week), just unveiled her new project, LaunchAngels.

    The company will be involved in crowd-funding for angel investors. The project will allow those who want to invest in startups, but who may not have the connections or understanding of angel investing, to join with other investors in a portfolio of startup funding.

    As Shermak explained, "I think LaunchAngels is a great opportunity to expand the VC space to those who would be angels, but the complexity of the investment process is keeping them from moving ahead."


    This excerpt is taken from the article 'VentureFizz Quick Hits - Tech/Innovation News You May Have Missed'. To read the full text of the article, please visit Venture Fizz.