The Seattle Angel Conference recently wrapped up its eighth round of funding. SAC was founded four years ago, and deploys two rounds of funding each year. The angel group has invested $1.7 million in startup companies. In doing so, the group has vetted more than 500 companies, and 17 either received a conference investment or received a side investment from participating angels.
During the past four years, SAC has helped educate 150 new angel investors, leading to a snowball effect of investing in the area. SAC founder John Sechrest thinks many more people are able to invest, but just don’t realize it.
“I think 9 percent of King county could be (accredited angel investors), and 99 percent of them don’t, mostly because they’re unaware,” Sechrest said. “So how do we make people be aware that they could be doing this and if they do it right, it could be to their benefit?”
Angel investing groups have been around the Puget Sound since 1985. There are eight active groups in the Seattle area: SAC, Alliance of Angels, Founder’s Co-op, Element 8, Wings, Puget Sound Venture Club, Keiretsu Forum of the Northwest, and Tie Angels Group Seattle, with more in development.
At SAC, each participating investor commits $5,000 and, over 12 weeks, learns how to invest with due diligence. Members of the fund decide together through a majority vote which startup will receive investment at the end.
According to Sechrest, the majority of angel groups are networks, which don’t require engagement further than a potential angel investor opting in or opting out of the fund. Because SAC requires its angel investors to be “active angels” in due diligence, investors learn how to be more effective in the process.
“It’s not a gamble, it’s just a risk, and managing that risk can produce good returns,” Sechrest said. “People in the community can make their community better by investing in their community. It’s not throwing your money away.”
In the latest SAC investment fund, 63 startups applied for funding. The applicants were narrowed down to seven finalists: Camp Native (Seattle), IXD (Bellevue), Grow Plastics (Bellevue), 6Crickets (Redmond), Slope (Seattle), 2Morrow (Kirkland), and Tenacity Health (Seattle).
Final presentations were completed on Nov. 18 for a $155,000 angel investment. When time came for investors to make a decision, the angels were unable to come to a consensus. The investment amount was increased to $200,000 and split between Camp Native and Tenacity.
SAC now is accepting investor applications for it’s spring 2016 round.