Boris Mann’s Personal Blog

Mar 2018

Open Angel Reboot

Open Angel Reboot

Shutting down the investment dinner series, call for collaborators

A couple of weeks ago we sent out an email to our members and angel investors letting them know that the February 2018 Open Angel investment dinner would be the last one. We opened the doors and invited everyone to attend, including many previous presenting companies.

Photo by Suzanne Rushton

Ed and Boris have been running the event for almost 4 years. It’s been a good experience but Ed and Boris both have other, increasingly demanding commitments, from Ed’s travel to Uganda to support Ensibuuko, to Boris’ new company Finhaven.

We originally created Open Angel because of the prevalence of pay-to-pitch (which still didn’t result in cheques written), or pitch theatre (startup presentations without any serious investors in attendance) events. As many of you know, we focused on “cheques written” as our sole measure of success.

We do feel proud of having run a high quality event that curated both presenting startups and investors, without charging startups to present. Many local investors stepped up and bought annual memberships, or paid to attend individual events.

Is Open Angel shutting down forever?

Open Angel Canada is a BC non-profit society. It has 5 directors — Ed, Boris, Justin Young from Osler, Amy Rae from Vanedge, and Alan Albert. It has a website, a contact & mailing list, and a bank account. It is a member of the National Angel Capital Organization (NACO).

The board has been a “working board” — meaning that much of the work has been done by board members directly. Except, of course, for our Progra Manager Shawna Quinton, who has been instrumental in helping run things smoothly for the past couple of years.

We also have a number of supporters we’ve called the “Unterboard” — a core group that we ask for feedback on new ideas and support in getting the word out.

Lastly, there have been a number of volunteer facilitators — mentors that were assigned to each presenting company ahead of the investment dinner pitch event. They met with the teams, workshopped the pitch deck, and helped explain what investors are looking for. Thanks to all of you that have helped out.

For now, we aren’t shutting down the society, but we are shutting down the investment dinner series.

Photo by Suzanne Rushton

Angel Investing in Vancouver

We seem to have a pretty good process for picking companies from the last research we did, but we haven’t seen an increase in the number or size of cheques written. We haven’t seen new angel investors step up. We have seen the creation of professional angel investment funds (Chris Bissonnette’s Pallasite Ventures in particular) that have had huge impact, but that has nothing to do with Open Angel.

Our sense is that, at best, we have redirected some of the existing investment dollars into the companies we curate. But we didn’t move the needle on seeing more deals funded or larger investments made, so we don’t think we changed the amount of early-stage angel investment risk capital in Vancouver.

We don’t know why, but we have some opinions:

Lack of new leads

The biggest issue we saw — especially since Open Angel isn’t a group that manages investments directly — is a lack of deal leads.

Of our members and attendees, few felt comfortable going first / negotiating the deal. More often than not, we see first-time founders being the ones who issue a term sheet, often a SAFE, and at best getting a few small $10K — $25K cheques from individuals.

There are some family offices (Conconi) and seed funds (Vancouver Founder’s Fund) who are great leads & were often attendees. These funds don’t necessarily work to broadly syndicate their deals, they tend to invest a little later, and they aren’t necessarily changing the number of deals they are doing so this doesn’t move the needle on deals in Vancouver.

Investors Feel Companies are “Too Early”

Many of the companies that presented at an Open Angel investment dinner told us that it was a pivotal moment for them. Their connection to the facilitation process and experience of the event “woke them up” for what investors needed to see.

These companies went on to get accepted into TechStars and other premium accelerator programs. And yet, they would often accept this funding, go through the program, and raise money on Demo Day without any Vancouver area investors participating.

This is an area which could be improved across Canada. Angel investors could invest into companies as they went into top-tier accelerator programs, and they would see a lift in valuation across the portfolio of companies by Demo Day. It would also keep ties back to home for those companies, rather than “losing” them to the US ecosystem.

Should Open Angel or some other group keep tabs on this or run a broad syndication program to invest in all Canadian startups going to foreign tech accelerators?

Investors Want to Find Their Own Deals

Before we started Open Angel, a common refrain amongst angel investors was that they would invest more if there were better companies to invest in. Our research shows that this just isn’t true.

If we have learned one thing from our efforts it’s that raising the bar for the companies that pitch doesn’t lead to more investment. There are a handful of professional angels who are genuinely looking for the best deals, but in cash-short Vancouver they don’t need a pitch event to find deals — everybody just comes to them.

The rest of the angels seem to prefer to source their own deals and don’t worry too much about whether or not those are the best available deals.

Attend the Open Angel Reboot Meeting

Many people have approached us saying they want to help, or perhaps take over, the investment dinner series, or to help reboot Open Angel in some way.

We are inviting people to come to an information sharing session on Wednesday, March 21st, from 4:30pm to 6:30pm, at the SFU VentureLabs space. We’ll share information, answer questions, and see how people want to move forward. Please register on our site if you’re going to attend→

We’ll ask that interested parties prepare a one page intention or vision document of what they want to do going forward, and submit that to us by the end of March. We’ll review it as a board, and see what’s next.

Thanks to everyone for your support and participation. We look forward to what’s next for Open Angel in Vancouver.

— Ed, Boris, Shawna