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Several weeks ago, we’d asked “What is a Super Angel Investor?” trying to provide a bit of clarity to startups, entrepreneurs and ourselves as to what this “new class” of investors actually was. Angel investor David Rose of Rose Tech Ventures and the New York Angels left a couple of thoughtful comments weighing in on the topic. Given the detail, quality and candor of his comments we wanted to highlight his comments separately on their own to ensure they didn’t get lost in the comment stream of the original post.
Below are Rose’s comments in their entirety about super angels as well as some questions we asked him after his initial comments:
[grin] Welcome to the nebulous, ever-shifting landscape of angeldom. I think you’ve done an excellent job of recapping the current bidding in the angel definition game. But I believe that there’s one additional factor you didn’t mention that may actually be even more important, and that’s the visibility/connections of the angel in question.
Before the recent burst of activity of SAs like Aydin (Aydin Senkut of Felicis Ventures), Roger (Roger Ehrenberg of IA Ventures), Josh (Josh Kopelman of First Round Capital), Dave (Dave McClure of 500 Startups), et al raising funds (and, for what it’s worth, I agree with Mark (Mark Suster of GRP Partners) and Ron (Ron Conway of SV Angel) about funds being funds, period) the “Super Angel” moniker was generally used to refer to high profile investors who had big name recognition and good industry contacts. If they also did a lot of deals, invested large amounts of money, led rounds themselves, and provided hands-on value (usually PR and introductions) for their companies, that was just icing on the cake.
But the fact is that some of the better-known Supes actually were/are writing pretty small checks ($25-$50K), doing relatively few deals (in some cases fewer than 5-6 a year) and not being involved much after the investment. With the changing landscape and rise of the seed funds, however (started initially by Josh Kopelman and Howard Morgan at First Round Capital coming up from the bottom, and funds like CRV and DFJ coming down from the top) the lines are getting pretty blurry and the players are routinely shifting categories. It’s hard to call Reid Hoffman a super angel now that he’s a full-fledged VC with his own seed fund…but what do you do about the 75+ companies he’s already invested in personally?
All in all, the definitions don’t mean much, but the result is a great one for entrepreneurs. There has been a rapid acceleration in the number of seed deals getting done around the country (and globally, for that matter; were you aware that Angelsoft now supports angel groups in over 60 countries?), at the same time that the cost of starting a technologically-leveraged business has been dropping drastically.
My guess (and hope!) is that this trend is going to continue for the foreseeable future, and I consider this a Good Thing.
David – Thanks for reading and for the comment. It’s great to have the candid perspectives of an angel investor like yourself.
A few questions we’d love to get your thoughts on:
1. Care to disclose the Super Angels who are writing small checks and doing few deals, i.e. those acting less than “super”?
2. Do you think designating any angel investor as a “super angel” makes sense? Or as per Mark Suster and Ron Conway’s suggestion, if it’s your own money, you’re an angel investor and if it’s someone else’s money, you’re a fund?
3. If super angel as a designation makes sense, what definition would you use?
Your final point is a great one. Entrepreneurs only stand to benefit from this boom in investors although we do hear from them that it is overwhelming. The ever-increasing choices are the reason we launched theFunding Recommendation Engine to help entrepreneurs make sense of and identify investors who match their business based on their actual funding history.
Thanks again for commenting. Look forward to your thoughts on the above.
Nah, I’m not getting into this particular shoving match. That’s why you see me answering here, and not on TC or the blogs of any of the participants [grin]. But my point is that there is absolutely NOTHING WRONG with writing small checks, and that in my opinion, as long as an investor is writing ANY check, the value that he or she brings to the table is completely in the eye of the entrepreneur. And if said entrepreneur believes that taking a $10K check from a a nationally-known name who can introduce you to other, bigger check writers (or customers, or strategic partners) is a good thing, that’s perfectly fine!
I’m not a big fan of the term Super Angel because I’m not sure it serves any useful purpose. If we eliminate the microVCs from the category the way Mark Suster, Ron Conway and I all would, that takes out probably 90% of the so-called supes (including Josh Kopelman, Aydin Senkut, Jeff Clavier (Softtech VC), Mike Maples (Floodgate), Reid Hoffman, Dave McClure, Roger Ehrenberg, Josh Kushner (Thrive Capital), Paul Allen, etc. etc.
The remainder, the ones actually investing their own funds, are probably best described with terms such as “active” if they do lots of deals, “deep pocketed” if they write large checks, “well connected” if they can introduce you to good people, “well known” if they have high name recognition, “smart money” if they are great strategic advisors, “experienced” if they’re willing and able to lead a round, etc. I guess that someone who scores high in many or most of the above categories could legitimately be described as an all-around Super Angel…but anyone who fits that definition is probably already figuring out how to raise a fund! So perhaps it’s a catch 22
Coming back to the ‘real’ angels (and not those with funds), the average active angel investor member of a legitimate US angel group has done roughly 10 deals, and averages one or two new ones a year, with an average initial check of about $25K. My guess is that there are probably 25,000 of those in the US. At the ends of the angel spectrum are the one-off angels, who somehow found themselves doing one, or perhaps two, equity deals, and the estimates are that there are probably 250,000 of those. Finally, the top end of the market is occupied by the ActiveDeepPocketedWellConnectedWellKnownSmartMoneyExperienced folks you’d like to call Super Angels, and depending on where you draw the line, they have probably each done between 25 and 125 deals, and there could be anywhere between 250 and 2500 of them.
Does that answer the question?