An angel network that started in Washington D.C. three years ago and has grown to hundreds of investors in five U.S. startup hubs will open its next chapter in the Triangle.
The Washington D.C. director of NextGen Angels Eric Koester sat on a panel of investors earlier today at the Internet Summit and said he'd be spending a lot more time in the Triangle working to amass a network of 100 angel investors willing to invest a minimum of $10,000 in at least one startup a year. They'd also have access to deals throughout the network and agree to help any portfolio company. Since its start in July 2012, NextGen has made 14 investments in companies that range from augmented and virtual reality storytelling and smart Google Glass-like glasses to fresh flower delivery, a custom winemaking operation and a driver's ed app. Funding the network's growth is a $1 million seed round closed in May 2015, which has helped it expand to Boston, New York City, Chicago and Austin so far. Koester says the network is already close to reaching its 100 investor goal in each of those cities. He expects to have a Raleigh-Durham chapter meeting monthly by April 2016. Cities like Atlanta, Pittsburgh and Philadelphia could be next.
While it's not a criteria for joining the network, most NextGen investors are under the age of 40 and have started or sold startups or served on a startup's executive team. It claims to have "the most entrepreneur-friendly angel investors in the world."
Koester is a good example of the type of investor desired. He founded Zaarly in San Francisco in 2011 and is now running Main Street Genome in Washington D.C., having raised millions in venture capital. The group's founder and CEO Dan Mindus previously served as investment director at Virginia's CIT Gap Funds and has overseen 30 investments. Others founded WeddingWire, Tech Cocktail, Nvite and Uber offices; they are execs at SpaceX, Google, Outbrain or RetailMeNot, or already work as venture capitalists or angels.
NextGen picked the Triangle for the next chapter because of its strong startup ecosystem, the quality of its emerging technology companies and entrepreneurs, great universities and a growing pipeline of strong exits. Koester also likes places like the Triangle that "have a chip on their shoulder" about Silicon Valley. They want to be as different as possible and prove success can happen outside of California—NextGen cities typically have a shortage of capital in town. The Triangle's barbeque doesn't hurt either.
The bottom line though is talent, he says.
"Tech talent has gotten harder to find in the densities you want, so some of our next markets are deeply entrenched tech places," Koester says. "It's called the Research Triangle—there is something to this."
More angels in the Triangle is welcome news for existing ones. Says Triangle Angel Partners co-founder Craig Stone:
"We have to syndicate because our deals aren't very big, so having more sources is a beautiful thing," he says. "We're not at the point where we're having to beat out other funds."
He doesn't expect NextGen to have too much trouble finding members either. TAP had no trouble raising its most recent fund, and Cofounders Capital raised its $12 million fund in less than six months.
Experience and track record if what matters, and while NextGen doesn't yet have that in the Triangle, it does have a good reputation and a strong network in D.C. and beyond.