Australian Angels Meet in Adelaide

March 3 2010 No Commented

Australian Angels Meet in Adelaide

The Australian Association of Angel Investors (AAAI) held their 3rd annual meeting in Adelaide last week.  Attendance was over 125, showing a steady increase over the past three years.  The messages of interest were consistent with what we are learning around the world. 

Not many VCs are raising new funds.  Knowledgeable leaders from all over the world delivered a consistent message:  Institutional investors are quite reluctant to invest as limited partners in new venture funds, even those with experienced management.  And, existing funds continue to invest in later stage ventures.  This does not bode well for angel-funded companies looking for follow-on investment in the $2 to $4 million range.

Focus on exits from the start.  Everyone agrees that we are working to build great companies.  But, we are also investors, not bankers.  We invest with the intent to harvest in 5–10 years.  And in line with the diminishing availability of big, follow-on investors, we angels need to be thinking about exits (not follow-on funding) from the outset.

Syndication among angel leaders is the talk of the town.  While international syndication is of interest to some angels and angel groups, there seems to be a consensus that regional syndication is of upmost importance to angel groups.  If VC funding is not available, then we angels need to work together to fund larger follow-on rounds.  In fact, building the trust among angel leaders necessary to foster syndication is a major reason for attending meetings such as the AAAI annual conference.

It’s a GREAT time to be an angel.  Find a group and jump in!

Bill Payne is the 2010 BNZ University of Auckland Business School Entrepreneur In Residence.