Angel Investing – New Series

I’d like to welcome Craig Hayashi, of Maple Leaf Angels, to StartupNorth. The following post is the first article of a new StartupNorth series on angel financing Craig will be writing. We’re excited to have Craig on board and look forward to learning from his experiences as a Canadian angel investor. — Jonas

Angel financing is an important part of a startup’s lifecycle, I’d like to help as much as I can to demystify the process. I am one of the founders of the Maple Leaf Angels one of the main organized angel groups in the Toronto area. As such, most of my articles will be written from the viewpoint of securing funding through an angel group.

So what is an angel group? Basically it is an organization that has angel investors as members and provides the infrastructure to intake companies looking for funding, screen them, and provide them a forum to pitch to the members of the group. The benefit to companies looking for funding is that it provides a defined place & process by which to submit a funding application that can reach many angel investors. The benefit to angel investors is that it provides a forum to see quality deals and pool together investor’s capital for deals. From a funding standpoint, the important thing to remember is that the group only exists to support the investment. At the end of the day, each individual angel investor is deciding if they want to invest and they individually write a cheque for how much they want to invest.

To help frame the overview with some actual figures, here are some statistics from the Angel Capital Association. The Angel Capital Association is an alliance of angel groups in North America and periodically surveys the groups to understand investment trends.

Average # of members in an angel group: 44

Average # of investments per year: 7

Average size of each investment: $241,000 USD

Average investment size per angel: $30,000 USD

The statistics above are fairly representative of the angel groups I have been involved with in Toronto. Which basically means that for a given financing deal, you can expect to be able to raise a few hundred thousand dollars spread across a dozen or so investors.

In future articles, I plan to cover various aspects of the angel financing process such as what makes a good investor presentation, what angel investors look for in making a financing decision, term sheets, valuation, etc. I welcome suggestions of topics you would like to hear about and if you have any questions in general about angel financing, feel free to contact me: craig <at> mapleleafangels.com

PlanetEye Launch Imminent

Update #2: 2startup has a review of the beta of Planeteye, confirming that they did launch in to a wider beta. We have no confirm/deny on the specific numbers we posted before, so we will leave the three paragraphs removed and will post the facts as we have them later if they are of any interest at all.

Check out the review, and please post any more links to reviews in the comments if you have them. Also check out 2Startup, which is a startup blog that seems to be just getting off the ground.

PlanetEye, possibly the stealthiest startup in Canada in the last 2 years, is finally ready for launch.

If you aren’t in Toronto, you probably haven’t heard of Planeteye. If you are in Toronto, you may only know of them because they employ some of the coolest developers in town – Slava Sakhnenko and Alan Hietala, along with the newly reshuffled Mark Evans, who used to be at, b5Media.

What is PlanetEye? Well, you have to do some digging to find out, so that’s what I did. Mum is the word for PlanetEye employees — who couldn’t be convinced to show as much as a screenshot pre-launch.

“Users upload images on to Planeteye?s servers and geo-tag them or any existing online photos. Visitors can then enter a location or landmark, and see far-off places through a previous traveller?s photo lens.” – blog

PlanetEye is a site that lets you store Images and allows you to organize them according to their GPS location. I am going to guess that reviews and other annotations are mixed in there. From my understanding, Planeteye has taken investment from Microsoft Research and makes extensive use of the World Wide Media Exchange platform. If you check out that demo, my guess is you get to see the bulk of PlanetEye’s value proposition. Perhaps it is a sort of fancy version of the EarthAlbum.

Planeteye first came to life out of a course at UofT called Business of Software. Rick Segal, a Venture Capitalist in Toronto, was a judge for the end-of-term business plan competition. Slava Sakhnenko, Elliott Tzaneteas, and Jennifer McCarthy (who has since gone to another of Rick’s portfolio companies, MusicIP) were presenting their business plan and it seems Rick liked it. He liked it so much in fact that he decided to put together a company based on their work, as well as the Microsoft Research patents we mentioned before. (Slava has the best account of it all here).

So, go grab your camera, and perhaps your GPS, and perhaps your laptop too, and get ready to geotag the hell out of your town. But first, you will have to sit tight. “Coming soooooon!”

Amazon Web Services – Learn to Scale

What are you going to do to scale when the time comes? Are you planning for it now? Does it involve Amazon EC2, S3, flexible payment or another Amazon service?

If you are curious and in Toronto, try to get out to the upcoming AmazonCamp (date, time and place all TBD — bit it will be soon) that Ryan Coleman is organizing.

Services like Amazon’s Web Services are going to be critical for startups who need to grow. It is just too expensive to manage all of your own hardware and if you are the flavor of the day, or if your customers have short bursts of demand, you are going to need to scale up as quickly as you will then need to scale back down. Every startup should at least asses the savings they might get from using on-demand storage and computing.

Check out bootstrapping with AWS to avoid VC over on slideshare.