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Giving new angels their wings

Posted by Scott Kirsner  October 20, 2011 12:21 PM

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In the wake of this week's big local acquisitions — Oracle bought Cambridge-based Endeca for an undisclosed amount, and Cisco bought BNI Video for $99 million — I'm thinking about how new angel investors get created.

Major acquisitions or initial public offerings can produce major wealth for a handful of early employees, giving them the financial security to start making risky bets on early-stage start-ups. (Often, they're start-ups founded by their friends and friends-of-friends.) eBay's acquisition of PayPal created the PayPal mafia. Google's IPO and ever-ascending stock price minted at least 50 new angels.

While I'm hopeful that the Endeca and BNI Video deals will produce some new angels, we've only seen a trickle appear on the scene in the past few years, after companies like Harmonix, EqualLogic, and Quattro Wireless got bought. Recent IPOs of Carbonite, Zipcar, and A123 Systems don't seem to have spawned a new flock of angels — yet.

One reason may be that in Boston, newly-rich people have long attained status by donating to institutions like the Museum of Fine Arts, the Boston Symphony, and their alma maters. I wonder whether we can somehow bestow angel investing — which supports entrepreneurs trying to create jobs in their communities — with the same aura of goodness as traditional philanthropy has. Helping to build the next EMC or Akamai (which in turn make their own contributions to non-profits) ought to confer as much status as having your name etched in marble somewhere.

AngelList (which is supported by the Cambridge-based VC firm Atlas Venture) has done a lot to make angel investors more visible, and also give them a better sense of which companies are out in the market looking for funding. Tomorrow, AngelList founder Babak Nivi is in Boston, speaking at a sold-out event organized by Atlas and BostInnovation. It's mostly targeted at entrepreneurs raising money, but who knows — it could also attract people considering their first angel investment.

And on Monday, the Angel Capital Association is running another of its regular educational workshops about how angel deals work.

Let's hope that those two events, coupled with more big exits, help increase the angel population in New England...

(Perhaps you have some other ideas?)

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About Scott Kirsner

Scott Kirsner was part of the team that launched Boston.com in 1995, and has been writing a column for the Globe since 2000. His work has also appeared in Wired, Fast Company, The New York Times, BusinessWeek, Newsweek, and Variety. Scott is also the author of the books "Fans, Friends & Followers" and "Inventing the Movies," was the editor of "The Convergence Guide: Life Sciences in New England," and was a contributor to "The Good City: Writers Explore 21st Century Boston." Scott also helps organize several local events on entrepreneurship, including the Nantucket Conference and Future Forward. Here's some background on how Scott decides what to cover, and how to pitch him a story idea.

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