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- 30 July, 2014By Shereen Shermak, CEO, Launch Angels For years there has been an ongoing debate on the benefits of working in a big corporate work environment versus a smaller, more agile startup environment. I have been in both worlds and also worked for government. Not only have I enjoyed each experience, but I have found meaningful roles working in all three. However, my partiality skews toward the startup.
The benefits of an early stage ecosystem can outweigh the experience in a larger corporate company, especially if you’re looking for a role that values innovation. Why? Here’s a look at 5 key differentiators and perks that a startup can offer: 1. Flexibility. Many folks that work for startups like the flexibility. The corporate world is designed around a “spouse at home” model and has made little progress over the last five decades. At startups, taking a day for a family event or to work from home to let the plumber in is normal for both men and women. 2. Control. Most educated, driven folks value control. Self-determination, for most human beings, is worth a high price. At a smaller company, the level of control is often worth the risk. 3. Leadership. For historically under-represented groups in management, sometimes joining the management team at a startup is the only shot they have at becoming part of the senior team. Note that startups with diverse management teams fail at a much lower rate than 90 percent+. 4. Security. This might sound surprising, but a startup’s short-term future is fairly predictable. Think of it this way, if you raise a round at your startup, you will have a pretty good fix on your role for the next 12 months. Also keep in mind that most folks at a startup do not have the goal to be at the same company in 10 years— that would be the definition of failure. On the other hand, corporate security isn't what it used to be, and when you’re a small fish in a big pond, it can be harder to have the foresight of your position’s stability. 5. Experience. Many entrepreneurs do it for the experience, not the exit potential. They are smart enough to know that risk-adjusted, the earnings from an exit are no better than a corporate bonus. It doesn’t, however, have to be one or the other. There’s room for collaboration. Big companies who see the value of an agile and fast-paced startup can acknowledge this by investing in incubators or forming internal funds that invest in startups. Large corporations that see this opportunity for corporate development are on a better track for success than those that try to emulate entrepreneurs.
- 22 July, 2014Since Launch Angels announced the VentureOut Fund, a micro-VC fund that will back early stage ventures with lesbian, gay, bisexual and transgender (LGBT) founders and management team members, and it will help create the next generation of LGBT entrepreneurs, we have received some great news coverage. Here's a listing of the articles that have come to our attention: Wall Street Journal: Launch Angels Seeks $2M for Fund to Back Lesbian, Gay, Bisexual, Transgender Founders Wall Street Journal (Roundup Story): The Daily Startup: Siemer Ventures, Now Wavemaker, Seeks ‘Reasonable’ Valuations With New Fund Dow Jones Story (Full version via subscription): Launch Angels Seeks $2M for Fund to Back LGBT Founders BetaBoston: Launch Angels raising money for new VentureOut fund focused on LGBT entrepreneurs Boston Business Journal: New Launch Angels fund will invest $2 million in LGBT-led startups Upstart Journal: The Pipeline: A fund for LGBT startups, Apple and IBM partner Pink News: US: Launch of $2 million venture capital fund to boost LGBT entrepreneurs Towleroad: VentureOut Fund Seeks to Invest in LGBT-Led Startups
- Launch Angels, a Boston-based equity crowdfunding firm, will raise $2 million for a new fund that seeks to invest in early-stage ventures with lesbian, gay, bisexual and transgender founders and management team members. The fund, called the VentureOut Fund, has a goal of creating "the next generation of LGBT entrepreneurs," according to a press release. The fund will also support LGBT entrepreneurs by connecting them to resources and mentors who can provide senior-level counsel and advice, the release stated. With a $2 million goal, the VentureOut Fund will pool capital from 15-20 investors and will invest in about 10 to 15 "promising, scalable" seed-stage companies, according to a release. A portion of the fund proceeds will also be donated to a non-profit supporting LGBT businesspeople.
This excerpt is taken from the article 'New Launch Angels fund will invest $2 million in LGBT-led startups'. To read the full text of the article, please visit Boston Business Journal.
- Boston-based Launch Angels announced a completely different type of affinity venture fund today. VentureOut will back early stage companies that have lesbian, gay, bisexual, and transgender founders and management team members. With a stated goal of creating “the next generation of LGBT entrepreneurs,” the new (expected $2 million) fund is a joint effort between Greg Wiles, who serve as the managing director of the VentureOut Fund from the West Coast, and Launch Angels’ chief executive Shereen Shermak. The idea of “affinity funds,” where people come together around a specific purpose, is something Shermak has developed as the focus for Launch Angels. The focus on LGBT founded and led businesses seemed like a perfect fit, and after talking with members of the community who agreed, Shermak connected with Wiles, who’d had the same idea on the West Coast. “It’s not until recently that a lot of LGBT entrepreneurs have been coming out of the closet, and are out,” Wiles said, “so it seemed to make sense to try to focus a venture capital fund on LGBT entrepreneurs, and to help leverage the LGBT community.”
This excerpt is taken from the article 'Launch Angels raising money for new VentureOut fund focused on LGBT entrepreneurs'. To read the full text of the article, please visit BetaBoston.
- 16 July, 2014Launch Angels, a startup that raises and manages tiny venture capital funds, is raising what could be a first-of-its-kind investment vehicle—one that would specifically provide seed funding for companies that have lesbian, gay, bisexual and transgender founders and managers. Under new rules that permit venture funds to advertise for qualified investors, the Boston firm looks to raise $2 million for its VentureOut Fund, which will make very early investments in 10 to 15 of these startups. Launch Angels, which is also raising a micro VC fund aimed at businesses led by women, believes there is strong demand for its VentureOut Fund. “This fund has come to us with a lot of momentum behind it,” Shereen Shermak, chief executive of Launch Angels, told VentureWire. While some venture investors have investment programs with a socially conscious theme, this appears to be the first venture capital fund aimed specifically at companies run by members of the lesbian, gay, bisexual and transgender, or LGBT, community.
This excerpt is taken from the article 'Launch Angels Seeks $2M for Fund to Back Lesbian, Gay, Bisexual, Transgender Founders'. To read the full text of the article, please visit Wall Street Journal.
- Boston, MA, July 16, 2014 — Today Launch Angels announces a new affinity venture fund, VentureOut. The Fund backs early stage ventures with lesbian, gay, bisexual and transgender (LGBT) founders and management team members, and it will help create the next generation of LGBT entrepreneurs.
The Fund: Invest with Impact The Fund will leverage the power of the LGBT community to source opportunities and provide high-quality LGBT-led deal flow. Additionally, the fund will support LGBT entrepreneurs by connecting them to resources and mentors who can provide senior-level counsel and advice. Targeting a close of $2 million, the VentureOut Fund will pool capital from 15-20 investors in order to have a large impact. It will invest in about 10 to 15 promising, scalable seed-stage companies and utilize the proven management capabilities of Launch Angels to provide investor relations, back office and investment support. A portion of the fund proceeds will be donated to a non-profit supporting LGBT businesspeople. The Team: Rich Experience, Proven Expertise Greg Wiles, Managing Director of the VentureOut Fund, will head the team of experienced investors and entrepreneurs who will source deals for the Fund. As a small business consultant based in Los Angeles and former investment professional at US Renewables Group, Wiles offers rich experience in strategic decision-making, fundraising and M&A. Wiles noted, “We’re hoping this will be a win for entrepreneurs, the LGBT community and fund members alike. LBGT entrepreneurs are becoming increasingly common, and every year we see many promising new scalable businesses started by LGBT founders. With this growing opportunity, I envision an abundance of promising deals for investors at the seed round and early stage.” Fund management, administration and monitoring will be handled by Launch Angels, who will also organize investment decisioning. Launch Angels is a specialist in creating personalized Affinity Venture funds, and has the experience of helping groups set up, administer and track custom funds. “We’re applying a disruptive model to the venture funding field. We start with groups, we identify their passions and interests, and then we craft the backbone management engine to fuel their vision,” said Shereen Shermak, Launch Angels CEO. “Creating an LGBT Affinity Fund is a natural evolution of this model, and we’re excited to help empower the next generation of LGBT entrepreneurs.” In addition to Wiles, the Investment Committee will include Shermak, who brings a deep background in financial services and entrepreneurship, Heidi E. Lehmann, New York-based digital media entrepreneur and investor, co-founder at SWSIMedia, Principal at MQM Ventures, and mentor in StartOut’s Lesbian Entrepreneur Mentoring Program, as well as other prominent LGBT investors and entrepreneurs. Upcoming Events The fund will be promoted through a series of networking events on both coasts. The first event will take place in NYC on July 29. For more information, please contact firstname.lastname@example.org. 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 custom tailors Affinity Venture Funds to your group’s unique structure, investment goals, desired engagement level, and investment process. We work with you to define fund size, budget for each investment, and deal criteria, then handle all management, reporting, filing, and tracking. PRESS CONTACTS Launch Angels Nicole Canulla Nicolec@launch-angels.com 617.645.6160
- 10 July, 2014Boston-based Amino announced this week that it raised $1.65 million in seed funding, including an investment from Launch Angels. The startup creates networks of mobile apps with a strong community focus that are built around specific like including K-pop, Minecraft, anime, and Doctor Who.
Launch Angels is pleased to add that it was one of the investors in the round. Below is a brief insight from Launch Angels CEO, Shereen Shermak regarding the deal: The Launch Angels Investment Committee selected Amino as part of its Where Fund committing very early in the Seed round. We have a longstanding relationship with CEO Ben Anderson—even before the raise—and it was a no brainer to get on board with his vision and ideas. We're thrilled to have gotten in on deal and are excited to see where the company is headed.
- 01 July, 2014As a chief executive of an investment platform and as an entrepreneur myself, I’m seeing the growing interest of angel investors to invest in something with which they can relate to or in which they feel a connection to. It could be the urge to give back something to the startup ecosystem or support a social cause; there’s a growing trend toward what I and my colleagues call “affinity funds.” An “affinity fund” is a customized venture fund for groups looking to unite around shared investment opportunities and goals. It provides an opportunity to invest in something that you care about—with people from your own network. The way to do this could be a venture capital fund based on your organization, alumni, specific beliefs, or personal social missions. For example, this could be an LGBT fund or a fund built around the university incubator at the school from which you graduated. In fact, most affinity funds on the market are generally related to universities or act as sidecar investment vehicles for angel groups. Beyond Angels wanting to give back to something they believe in, we’re seeing a need for affinity funds due to the increasing entrepreneurship focus within universities. Many universities want to support their programs and incubators with capital for their companies. In tandem with this, there’s also a growing capital crunch that includes a lack of seed capital. These factors drive the need for more specialized funding. Let me explain how and why this investment model works. A school with an entrepreneurship program has some percentage of alumni who could be more likely to write checks to promote successful companies that come out of their school, than to do a blind contribution. Not only is this an opportunity for the school to tighten its relationship to the alumni and provide an experience rather than a Thank You note, but it’s an opportunity for alumni to get into early stage investing with companies they feel they have a stake in and would be willing to mentor or help. With all this said, this is still a highly fractured and fairly new space, so it’s hard to assess the size of the industry. Companies like mine are helping activate these groups, showing them the opportunity that is available to them and then helping build a customized fund. I expect to see affinity funds become more and more common. If you think an affinity fund could be for you, I’ve created a checklist including a number of key decisions that need to be considered before beginning a fund. Here are nine areas to think about if you want to create an affinity fund:
- 18 June, 2014After their acquisition by PayPal, the employees of Where Inc. knew they wanted to give back to the local startup community. They also knew that they wanted to do so as a group—this could maximize their impact and at the same time give them a way stay connected socially.
Launch Angels was the perfect solution for them. Following is an overview of how Where Inc.’s employees were able to give back, and how they were able to do so together. You can also check out all the details via the case study. About Where Inc. & its Employees Supporting local Boston startups was already important to a number of Where employees, many of which already served as mentors, advisors and investors for local startups. When PayPal, a division of the auction giant eBay, acquired Where for a reported $135 million, an even greater number of Where employees found themselves with the financial freedom to begin making angel investments for the first time. Challenge In the beginning, it was easy to share information because they saw each other almost every day at the Where office. As time went on employees like Doug Hurd and Joshua Summers left Where (now rebranded as the PayPal Media Network) to found their own ventures. As they spread out across Boston and across the country, it became increasingly difficult for everyone to keep in touch and share their investing activities. Even with their best efforts to stay in touch, both experienced and aspiring investors saw some great investment opportunities pass them by because they were not organized. Forming an angel group, they concluded, would be a good way to introduce structure and formality into the deal sharing process. However, after time passed and multiple conversations about “getting together to invest,” the Where group was no closer to forming an angel group than they were when Where was first acquired. Solution The PayPal Media Network remained in Boston. The company dedicated a portion of its resources to supporting a startup incubator space that provided early stage companies with professional coworking space, as well as access to mentors, coaches, and VC and angel investors. It was through their involvement with the incubator that the group reached out to Launch Angels. After informal conversations with the group, Launch Angels confirmed enough interest to begin formally exploring the creation of a fund specifically for the group. After much due diligence, discussion and research, the Where Angels Fund was born—a $1 million venture fund focused on areas like mobile apps, advertising technology, consumer technologies and digital media. Making an Impact Since the fund closed in January 2014, the Where Angels Fund has invested in seven startups and deployed just over one-third of its initial capital. The investments have included companies in adtech and mobile spaces (the details of which cannot be announced yet), as well as in companies like Zagster, Seva Call and Klymit. Beyond the financial, the fund’s investors are connecting with each other. They come together to give feedback on the startups being considered for funding, to interview the management teams during the diligence process, and to debate the merits of Business Model A over Business Model B in the lunchroom at the PayPal Media Network offices.
- 16 June, 20146 Questions Every Entrepreneur can Expect to be Asked As a fund manager, investor and entrepreneur, I’ve listened and been a part of dozens of pitches. While they all have a uniqueness to them and an element of excitement, not all go off without a hitch. What goes wrong can vary. Sometimes it’s the business concept, sometimes it’s the plan, but in some cases it’s the entrepreneur’s pitch. Can the last be avoided? In many instances, yes. While there are a lot of great tips available on how to prep for a pitch, and there’s also plenty of advice on how to successfully execute a meeting, I think there’s something Investors haven’t shared. There’s more to a good pitch than being concise, knowing your market and not reading a PowerPoint deck. I want to let Entrepreneurs in on a little secret: there are a few questions that you can expect to be asked…every time. Expect these and prepare appropriately, and your chances at nailing the pitch have skyrocketed: 1. What’s your complete competitive landscape look like—beyond just where you’re playing? An entrepreneur needs to demonstrate that they understand (and respect) the competitive environment they are operating in. What sets them apart from the competition? I want to see that companies understand their growth and contraction trends on their competition, especially as it relates to their product or service. As part of understanding the competitive landscape, it’s also very important to understand what areas entrepreneurs choose not to compete in and why they opted not to pursue those areas—knowing where not to compete (because it is outside the current capabilities of the organization) demonstrates a high level of self-awareness. 2. What’s your competitive advantage? An entrepreneur must be prepared to talk about how his/her solution better, faster or cheaper than existing solutions and how much better, faster or cheaper it is. He or she should be able to quantify the customer value proposition, validate that the solution is better or provide data to indicate that such items are meaningful to the customer. 3. What are your achievements and milestones? Are goals being met or is the company tracking well to meet them. Have there been setbacks that forced a change in plans? If so, what was learned from those situations? I am also very interested in upcoming milestones and challenges. How will an investment help reach those milestones? What are the biggest challenges, weakness and roadblocks and how are they being addressed and overcome (e.g. key hires, change of revenue model or sales strategy, etc.). 4. What are the risks? It's always better that an entrepreneur share their risks with potential investors—it builds trust and again shows self-awareness as well as a pragmatic view of the overall forces that may impact the company. 5. What’s the exit strategy? Every investor wants to talk about exit strategies, and they want to know that his/her investment companies have a sophisticated understanding of the exit strategies that would likely be available to the business. Why? As an investor, I want to invest in companies that will have a positive return in a short to moderate timeframe (say 3 to 7 years). Startups need capital, I need a positive return on my investment. I want to know that the company is thinking about this balance of needs and is actively developing the product, partnerships, network, and understanding of the motivations behind M&As in their industry, which will facilitate that exit opportunity in the future. 6. Why me? I want to know how an investment from me can add value to an organization and help meet milestones. In my opinion, a smart entrepreneur has done his homework on potential investors and has strategically targeted me for a specific reason.
- 30 May, 2014Shereen Shermak believes crowdfunding has the power to even the funding gap between businesses run by women and those by men, and she's crowdfunding herself to raise money to prove it.
Shereen Shermak thinks crowdfunding can help solve the gender funding gap. In fact, the chief executive of the Boston-based venture firm Launch Angels is so convinced that she's turned to crowdfunding herself. Earlier this month, Launch Angels created a new fund that invests in women-led and women-owned businesses. It listed the fund on SeedInvest, a highly selective crowdfunding platform that accepts only accredited investors, with a goal to reach $500,000 to $1 million through online and offline funding. Shermak said the company already soft-circled about $200,000 by the time it launched. “Now is a terrific time [to launch the fund] because the statistics on women in venture capital took a step back in the last couple of years,” Shermak tells me. “Between 2 and 7 percent of venture capital goes to women. That’s not representative of how many women entrepreneurs there are out there.” In contrast, at crowdfunding website Indiegogo, more than 40 percent of successful deals are led by women. “Crowdfunding is working for women, so we thought, 'Let’s use that for the Women-Led Fund,'” Shermak says.
This excerpt is taken from the article 'Can crowdfunding close the gender loot gap? This VC thinks so'. To read the full text of the article, please visit Upstart Business Journal.
- 30 May, 2014Do you have an idea for a new business? While you may find it easy to generate many new business ideas, it isn't as easy to identify which ones are truly stellar. How do you know when you've come up with a fabulous business idea? We asked successful business owners what key characteristics point to a great business idea. Here's what they told us. It fills a need and solves a problem One simple sign of a great business idea is that people want it and need it. Wade Gilchrist, startup consultant and host at TechStartRadio.com, said he likes to tell startups that they should identify a problem that is currently not being solved or is not being solved well. If your idea is a better solution than those currently available, and there is a way to prove it's a moneymaker before a long and expensive development process is undertaken, it could be a great business, Gilchrist said. And don't think your idea has to be especially innovative, said Ebong Eka, a small business expert and television personality. "Too many entrepreneurs believe that good business ideas have to be unique or the first of its kind," he said. “That only matters with products you can patent, and biopharmaceuticals." In fact, it's more important for your idea to solve a real-world problem, and solve it well, said Shireen Shermak, CEO of venture capital and startup firm Launch Angels. "A great business idea must solve an easily articulated problem that a large group would like to have solved," Shermak said. "If you are creating a solution when there is no problem, no amount of marketing is going to create a big business." It reaches large and/or multiple markets An easily identifiable and measurable potential market for the product or service is another hallmark of a great business idea, Eka said. "It's imperative that, when you're sharing your idea, you can describe the market demographics," he said. And at the very least, the market must be big enough to make money. “The idea must target a large market," Shermak added. Another market-related characteristic of a solid business idea is that it can be replicated in other markets, said Greg Isenberg, a 25-year-old award-winning serial entrepreneur, founder of Wall StreetSurvivor and CEO of mobile video app 5by.com. After all, if a business works in San Francisco, it's likely to work in Los Angeles, he said. "All of a sudden, you've doubled your target market overnight," Isenberg said. However, he cautioned that reaching multiple markets is relatively easy compared to the prep work required to fine-tune a great business idea. "Perfecting your business model such that it works in one market is often the hardest part," he said. "You might as well be able to scale it to many markets so that you can take advantage of all that hard work you did perfecting the model."
This excerpt is taken from the article '5 Signs You've Got a Great Business Idea'. To read the full text of the article, please visit Business News Daily.
- Here are three things investors and organizations can do to help reduce the funding gap that exists for women-led businesses.
Now that we’ve explored the state of women-led businesses (WLBs), the funding challenges they face, and their potential, it’s important to look at how we can pave the way to gender equality. Three steps for investors and organizations to help reduce the funding gap for women-led businesses: 1. Decide to change – When organizations choose to become more inclusive and opt for a holistic and quota-free approach to increasing diversity, they can do so without sacrificing rigor, quality, or reputation (academia has shown how this is possible). 2. Take the focus off of gender – In the world of entrepreneurial finance, crowdfunding and equity crowdfunding are introducing gender-neutralizing filters. As a result, a surprising number of women are raising capital and running successful campaigns (e.g. CircleUp, which has helped companies raise more than $30 million in growth capital, recently reported that 42 percent of companies on its platform are WLBs). 3. Diversify the judges – Some incubators such as the PayPal Start Tank in Boston are approaching their selection process differently. Through a blind evaluation and a diverse selection committee, the result is more companies with women founders. For more information on the current state of WLBs and how we can help promote gender equality, download the full whitepaper.
- Part I of our Bright Spots blog series, exploring strengths of women-led businesses and initiatives that can be taken to help deserving women entrepreneurs receive support for their startups.
From 1997 to 2013, the number of women-led businesses (WLBs) increased almost 60 percent and grew at a rate that was nearly 12 times the national average. Not only are more women founding companies, they are founding efficient companies that are producing better than average returns for investors. However, they continue to be underserved by venture and other early stage capital. Launch Angels just produced a white paper, Bright Spots: Women & Capital, which explores how WLBs are on the rise despite funding gaps. The paper also identifies gender parity campaigns that have succeeded against overwhelming odds. Following are some fast facts from the paper:
- It is harder for women-led startups to raise capital: While the exact number is difficult to calculate, it is estimated that only 4.2 to 7 percent of money invested by venture capitalists is invested in women-led businesses.
- Women are successful business leaders: The truth is that not only are WLBs successful, but they are efficient and have proven to do more with less capital. In fact, the Kaufmann Foundation found that compared to male-owned counterparts, women-led high-tech companies delivered a 35 percent higher ROI, and 12 percent higher revenue to venture investors.
- Women are innovators: The number of women listed as inventors on patents filed in the United States doubled to 18 percent between 1990 and 2012, and according to research by the Global Entrepreneurship Monitor, women lead men in total entrepreneurial activity relating to innovative products and services.
- 16 May, 2014Launch Angels is now the easiest way to share a venture portfolio with your friends.
We all have groups of colleagues, alumni, friends, and family with whom we share a close bond. That group you worked with for years to make a small company larger. The college friends you connect with on Facebook. The people you vacation with every other year. You’d love to put money together to start a fund that unites the group in a particular mission, or around the ideal that first brought you together, or simply just so that you have a reason to stay connected with each other now that your lives are taking you in different directions. If you've gone so far as to research avenues for your friends to make such a group investment then you know there are two major road blocks. The first is that investing decisions are very personal and while folks may be interested in investing as a group, they may not be comfortable letting each other know the size of those investments. The second is that there are not many existing investment vehicles that enable groups to accomplish their investing goals together. And when these vehicles do exist, there is no ‘just right solution’ that meets the desires of each fund member. This is where Launch Angels can help. Launch Angels is already the easiest way to build a venture portfolio, but now through Launch Angels Affinity Funds, Launch Angels is the easiest way to share a venture portfolio with your friends. Here’s why accredited investors we’ve talked to like our Affinity Funds:
- Each fund's portfolio is tailor-made and diversified to help you pursue your personal interests and goals.
- Funds are structured so you can engage with your group the way you want, and are able to accommodate both passive and active involvement in the fund management.
- All legal paperwork and filing for the fund & investment deals is done for you.
- Gain access to Launch Angels' deal flow in addition to investment opportunities from individual fund LPs.
- All investment opportunities are vetted by Launch Angels and put through our professional diligence process.
-Shereen Shermak, CEOPlease note that investing, including early stage investments like those in Launch Angels’ funds, involves significant risk of loss. It is not suitable for all investors, and you should make sure you understand the risks involved before trading and seek independent advice, if necessary. Any opinions, news, research, analyses, performance strategies, prices, charts, or other information are not necessarily predictive of any particular result and do not constitute advice. Past performance is no indication of future results. CRD Org#: 170562
- 05 May, 2014Launch Angels is opening its funds to an even broader audience of accredited investors. This week it listed its recently launched Women-Led Fund on SeedInvest, an elite crowdfunding platform.
Launch Angels Lists Its Women-Led Fund with Prominent Platform SeedInvestBoston, MA, May 5, 2014—Launch Angels, an investment platform that leverages traditional and equity crowdfunding sources for deals, is opening its funds to an even broader audience of accredited investors. This week it listed its recently launched Women-Led Fund on SeedInvest, an elite crowdfunding platform. Said Launch Angels CEO Shereen Shermak, “We have already generated considerable backing for our Women-Led Fund offline. But we felt it was important to open this fund to as many participants as possible. Our Women-Led Fund will invest in early stage business that are women led, managed, and friendly. We’re helping close a major funding gap for women’s ventures that will benefit women, the economy, and investors.” Launch Angels is listing the Women-Led Fund with a $250,000 minimum raise, and overall goal of reaching $500,000-$1 million through online and offline funding. The team has already soft-circled approximately $200,000. This fund may be reviewed at: https://www.seedinvest.com/launch.angels.women.led.fund. Shermak notes SeedInvest was a great fit for the online funding push. “SeedInvest offers the investor conveniences such as simplified online deal review, signature tools, and online accreditation. Even more importantly to us is SeedInvest’s terms. Unlike many competitors, who keep 20 percent of any returns through carried interest, SeedInvest is completely free for investors.” SeedInvest is also highly selective, listing only about three percent of all companies who apply. Founded by former professional investors, it solely focuses on startups which are the cream of the crop. That formula has served to attract larger, more sophisticated investors. It also served SeedInvest well when it recently launched a top-up campaign for its $3 million Series A round on its own platform. As Shermak noted, the Women-Led Fund campaign on SeedInvest is an enlightening experience. “For us, given our investments in equity crowdfunding deals, it’s very helpful to understand this process from the inside. We’re seeing from an entrepreneur’s perspective the pros and cons of equity crowdfunding.” 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 deals. Investors enjoy the benefits of venture investing, without the hassle of research, paperwork, and tracking. General Contact Info Mandie Holmes MandieH@Launch-Angels.com Phone: 917.592.3729 Email: email@example.com Press Contact Info Nicole Canulla NicoleC@Launch-Angels.com
- 25 April, 2014A special evening with some of the great entrepreneurs added to Launch Angels’ investment portfolio in 2014 -- May 20th, 2014.
A special evening with some of the great entrepreneurs added to Launch Angels' investment portfolio in 2014.
May 20th, 2014 | 6:30 to 8:30pm | Boston, MAAfter being acquired by PayPal for $135 million, employees of the mobile marketing startup Where started exploring ways in which they could capitalize on their connections to the local startup community and support budding entrepreneurs through angel investing. Their goals were simple: stay engaged, stay connected, share investments, and fund great companies. Their solution was the Where Angels Fund, a venture capital fund that invests in early stage startups from the Boston-area and beyond. The fund is managed by Launch Angels, a micro-venture capital firm that enables individuals to support early stage companies while investing in a professionally managed portfolio of startups. Come and meet the first batch of companies to receive capital through the Where Angel Fund. The evening will be a food and fun filled event featuring visits from the founders of each of the Where Fund portfolio companies, and a chance to mingle with fund investors and aspiring angels. The showcase event will also mark the official launch of Launch Angels' Early Traction Fund, a venture fund that enables individuals to invest in a diverse portfolio of startup companies for a similar investment amount as a typical angel investment.
- 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 CommitteeBoston, 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 RisksInvestors 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 AngelsLaunch 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.
- 21 March, 2014Over 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.
-Shereen Shermak, CEO
- 21 March, 2014Everything 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 CapitalThank 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 NewsAlthough 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.
- 18 March, 2014The 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 FundBoston, 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 RisksInvestors 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 AngelsLaunch 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.
- 31 January, 2014
How Women Are Succeeding with Crowdfunding, Angel Investing and Venture CapitalSponsored 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
- 20 January, 2014Between 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 firstname.lastname@example.org.
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 NewsWith 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 RearviewConsolidation, 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 RideAlt finance takes hold, new funding models appear, and enterprise players step up. “10 bold predictions for crowdfunding.” Read more...
The Billion-Banner YearThis 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 RiseThe 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...
- 16 January, 2014As 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:
- 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.
- 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.
- 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.
- 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.
-Shereen Shermak, CEO
- 10 January, 2014We’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 email@example.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.
- 06 January, 2014
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.
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.
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.
- 23 December, 2013There'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.
- 12 December, 2013
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.
- 10 December, 2013Here'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.
Future Forward AppearanceOn 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 ParticipationThe 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-OutPayPal’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.
Women's Fund Next For Launch AngelsWe’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:
- Women-led. Companies with a strong female presence on the management team or Board, and/or a track record of promoting women.
- Women-backed. Companies that are backed by women’s capital, where women have a stake of 40% or more in the venture.
- Women-friendly. Companies that offer women-friendly products or services, or have especially female/family-friendly policies.
The Un-Event of the SeasonUnPitch 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.
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.
- 03 December, 2013
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:
- I don’t have the wealth to angel invest.
- I don’t have the time to angel invest.
- 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.
- 20 November, 2013Shereen 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.
- 08 November, 2013If 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.
- 04 November, 2013Launch 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, 2013UPDATE 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, 2013As 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.
- 15 October, 2013
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.
- 15 October, 2013
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.
- 27 September, 2013
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.