Open Angel Forum Is Off To A Great Start

When I wrote my post titled An Angel Investor Group Move That Makes Me Vomit I expected to write my little rant and be done with it.  A month or so later Jason Calacanis picked up the mantle and started a Jihad against the idea of angel groups charging entrepreneurs to pitch to them.

The result is the Open Angel Forum.  I participated in the second event last week in Boulder.  I thought it was spectacular and the twitter stream from #OAFCO reflected this sentiment.  About 20 active (at least four investments in the past year) early stage investors (angels and seed stage VCs) attended.  Six entrepreneurs presented their companies in short seven minute pitches.  Five sponsors underwrote the food and drink at the event.  There was plenty of networking before and after.  That was it – small, intimate, and highly relevant to all.

Most of the presenters wrote blog posts about the event which will give you a great feel for what they experienced.

The events continue with Open Angel Forum San Francisco on March 4th and Open Angel Forum New York City on April 8th.  If you are an entrepreneur or an angel investor in either city, check them out.

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  • Phil Sugar

    Damn impressed!

    Its one thing to whine about something (I did), but its a world of difference to go out and change it.

  • So what were the results of the event though (so far) ? I mean, how many of the presenting companies are now in talks/negotiations for actual funding? Did you personally take an interest in anything you saw? What are the next steps for the companies that presented at this?

    (Disclosure: I'm probably going to apply for the event NYC to pitch/present my concept/business)

  • the google ads in your post look like they are advertizing for the very thing you are trying to displace.

  • I've trained myself to skip right over most ads (regardless of where they are on a page)…but now that you point it out, it is pretty funny! One of the downsides to running keyword-based ads on a blog I think (they don't really take context , intent, or tone into account)

  • In LA, I think 4 of the 5 are now "done deals". In Boulder, I know that at least 3 of the 5 (that I've heard about) have new interest from investors they'd didn't know before OAF. I am looking at 1 or 2 closely myself.

  • Sounds like a great event.

    Our local ACA group is based on a similar philosphy of trying to keep it simple and just provide regular opportunities for quality companies to meet qualified investors.

    Unfortunately, it takes a lot of work to make something "simple" happen and balancing the often competing interests of making a living and doing service work can be tricky, so I can certainly empathize with the desire to try and combine the activities.

  • Thanks that is great to hear!

  • fyi you can block Google Ads from unwanted advertisers, in your Google AdSense control panel.

  • Yeah – I know. I'm just more amused by the silliness and persistence of some of the ads.

  • YST

    Props for people that do things.
    Where I live, there are tons of conferences with people "discussing" (whining?) about why the government doesn't do this and doesn't do that to help startups. I wish I could get paid an honorarium to attend them, I'd make millions.

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  • Ann

    It would be better for everyone if the entire OAF event(s) were posted on video so those of us who are a continent away can get some idea of the standard required to present and raise interest.

  • it's of course a great idea, but there are two issues. 1- it costs money and time to record this stuff at decent quality, and 2 – most startups don't want their pitch on video for everyone to look at (some don't mid and we could do those).

    • Dave, in addition to privacy issues – trust me you DO NOT want to post any video from the OAF – per my post to Brad.

      Startups cannot pitch to the public for a private securities investment. Recommend you speak with Sue Preston in SF, she's written two books on Angel Investment, about Regulation D and parts 505/506 of the securities laws.

  • David, how's it going; good points.

    Ann, there is a third, and much bigger problem with this – because of the Federal and State Laws relative to any (private, or public) securities offerings. I'm a Series 7/63/55 registered rep (in order to do prop tradign), so i learned about this while studying for the Federal and State securities tests.

    The Federal Securities Act of 1933 has "rule 505" which pertains to private equity offerings (actually there is rule 506, and several others that pertain, too; plus relating laws pertinent in each state. It restricts solicitation of equity investments to accredited investors, and to a certain # of investors (35 max; varies by state). Since individual states have their own securities laws which further refine the federal regulations, some states are stricter at enforcement than others. But I don't think there's any state in the U.S. where you can "legally" have an open solicitation to the public, for equity investment.

    According to the Federal Law, if you are responsible for an investment presentation in which results in non-accredited investors writing a check — then later on they decide it was a mistake, after it doesn't work out — then you (the party that facilitates the solicitation) are liable to re-imburse them for 200% of their original investment. The penalties in some states (e.g. California) are harsher. And some states enforce it more diligently than others.

    Also, you cannot have promotional agents or "success fees" for private offerings; those will get you thrown in jail faster than a bank robbery. I have seen those suggested for Angel Groups. Just Google it, and you'll see that's REALLY asking for (quick) trouble.

    Problem is, when an equity investment goes south, then some investors are bound to have their lawyer pursue whoever acted as the "broker" or "agent", and the lawyers come in and this stuff can (read: will) dig all this law up very quickly; then the specialists and the agencies come in. So you can see where if an Angel group video casted "a live deal" on the internet and people were writing checks from all over, where you'd put the group at risk from getting sacked not only by the Feds, but by 50 state securities commissions — AND god knows who else:(

    I have recently interviewed a number of the top experts nationwide on this topic, and have attended organizational meetings for new Angel groups all over the West Coast, in the past year. This is always a big topic that has to be dealt with and written into the charter, to protect the members and the organizers.

    If you want to talk to an expert about it, contact my friend Sue Preston of San Francisco. She's an attorney that has written two of the best books on Angel investing, and she is active in advising Angel groups on what to what out for.

    Unfortunately, there has been a long history of criminal manipulation and exploitation with regards to securities offerings, which creates a massive legal overhang that impacts every modern-day startup making a private or public offering.

    hth, -steve b.

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  • thanks for you post

  • There is no beer drinking or Poker – it is a very high level cross section of entrepreneurs and executives, all of which pay to hear pitches from entrepreneurs. I'm a former member, so have no bias to them either way. But Keiretsu Forum members have invested in 220+ startups; have made sizeable donations to over 200 international charities, and have never criticised any other group (except for me, criticising Jason).

    Jason Calicanis, on the other hand – is at the root of the OAF, and it doesn't require a genius IQ to see his character. So why would the OAF want to affiliate itself with such a negative person? And above all, yourself – the polar opposite? I'm perplexed.

    • typo: *At Keiretus Forum meetings,* … there is no beer drinking or poker –

      (I had to edit my post down, since you blog is now refusing to accept posts with > ~2 paragraphs…)

      fyi – as a background fact – the Keiretus Forum has never criticized, or implicitly criticized, any other group, as the title of our post implies.. except for my own posts criticizing Jason (as a member, but not representing the K4).

      • Brad, fyi I intended to post this under your NEW post: "Now THAT's how you do an Angel Pitch Event". But here i am messing with running Windows 7 under Parallels on my MBP. It is missing characters I type, and the IE 8 browser is tripping me up. So I ended up making a bad click, and posting it under the wrong post:)

        I need Windows 7 and IE 8 because i'm involved with a startup that is all-in for the Microsoft Cloud… but i'm going back to OS X + Safari/FF for my browsing…

    • Steve – I respect your perspective on Keiretsu Forum. However, I've had numerous entrepreneurs approach me and ask if it made sense for them to pay Keiretsu Forum to pitch at their events. I think this is a horrible practice and wrote about it a while ago, before Jason's attack on Keiretsu Forum started. My understanding is that Keiretsu Forum has considered, or has changed, their policy of charging companies with respect to early stage companies. As someone who hasn't paid much attention to how this has played out, I don't know what the current state of play at Keiretsu Forum.

      Regard Jason – I think what he is doing with Open Angel Forum is dynamite. I know he was aggressive in his confrontation around Keiretsu Forum – that's his style and it's something some of us love about him. And regardless of our difference of opinion on Keiretsu Forum, I'm perfectly happy to accept your viewpoint that you think it's useful for entrepreneurs. My person focus on this issue is to create as many free venues and forums for entrepreneurs and active angel investors to get together to try to put together financings to create new companies.

      And – in my world, entrepreneurs enjoy drinking a beer and playing poker, especially with their potential angel investors, after having a pitch type event.

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