Launchpad Venture Group
The Launchpad Venture Group is one of the largest and top three most active Angel groups in the country, in terms of deal volume and dollars invested. The group is capped at 150 investors, and has a long waitlist to get in. The group puts about $8 million to work per year, and currently has a portfolio of 65+ active companies in it, with a net valuation of around $100 million. Babson is fortunate to be the home of some of their group meetings. Here, we interview Christopher Mirabile, who is the Managing Director at Launchpad Venture Group, as well as head of the Angel Capital Association.
How is an Angel different from a Venture Capitalist?
Angels are investing their own money, whereas venture capitalists are investing other people’s money. Angels tend to go earlier stage than VCs, and tend to have smaller rounds. Interestingly, the angel market consists of two types of angels: those who work alone, and those who work in a network of some sort. A network might be a group of people who have pooled their money into a fund, or who collaborate on ideas. Launchpad Venture Group is an organized group of angels. We have a tight, diligent, and respectful process, for both the entrepreneur and our members, and pay a lot of attention to deal terms. We prefer to do properly priced equity rounds, which usually means taking board seat.
How and why was the Launchpad Venture Group founded?
We were founded 17 years ago in 2000 as a group of like-minded, early stage tech investors who wanted to collaborate together on their investments. The basic reason is that we are investing in these very early stage companies, and startups fail all the time. If you want to make any money as an angel you need to be very diversified, since many companies of your portfolio may fail. The other reality is that the investment process is a ton of work. Launchpad was founded to help ease that load in a difficult asset class. Some angel groups are pretty mellow, and more social. This group is social, but we are primarily focused on investing. One of the key differentiators is that, not only are we capable of leading a round, we prefer to lead a round. A lot of investors don’t have the experience or the clout to make a round happen, and a lot of people don’t have the leads. We typically lead the round, negotiating with the company and setting the deal terms that everyone else reviews.
What do you look for when investing in companies? Do you identify startups you want to work with, or do they find you?
The majority of companies come to Launchpad Venture Group. But the majority of companies that we pay attention to are “hand carried.” Some members have a lot of access to new startups; the group has incubator mentors and judges on business plan competitions. If there is an innovation outflow anywhere in Boston, we want a member there with a bucket. For instance, we had ten or twelve people at Babson’s Rocket Pitch, scoping out the startups. We also narrow down the companies by focusing on three main areas – enterprise software, health and life sciences (medical devices, diagnostics, healthcare IT, and digital health), Green tech/Ed Tech/Misc.
What is your definition of entrepreneurship?
I wrote an article a few years ago that seeks to answer whether entrepreneurs are daredevils or tweakers. Entrepreneurs are people who aren’t satisfied with the way things are, and who have the courage and imagination to go do something about it. When we look for entrepreneurs we’re looking for certain temperamental attributes. In terms of the CEO, we are looking for certain elements of temperament, like tenacity, really good communication and networking skills, high EQ (people skills), leadership charisma, super-high integrity, and emotional intelligence (especially the ability to take advice).
What does the world need from entrepreneurs today?
We need a little bit more imagination and a little bit more courage to tackle problems that matter. We also need more execution to pull it off. A lot of entrepreneurs hedge the risk by going for incremental improvements in areas that are already really well explored. But entrepreneurship is the “art class” of curriculum; something different and unexpected is encouraged! People are bit too timid with their ideas…go big or go home.
What tips do you have entrepreneurs that are looking to fundraise?
One of the most fundamental pieces of advice is to figure out how to network really well. Someone who wants to explore the topic can check out my column in Inc., which targets entrepreneurs asking these same questions about how to network and how to fundraise.
What is one of the strangest things you’ve seen during your time at Launchpad Venture Group?
There was a guy who pitched us who was trying to raise $4 billion to build a custom truck, and a rocket to launch it to the moon. The truck would drag this plow around that had little wheels, which would raise a little pile of moondust, and then the shadows would make it visible to earthlings. Moon advertising!
How would a startup get involved with Launchpad Venture Group or a similar group? What are the first steps?
My advice is to not apply cold, but instead to network. Go on LinkedIn, search for Launchpad Venture Group. See who you know, or find someone who knows an angel. Network around until you get to meet one. Ask that connection to spend a little social capital to introduce you to them. There are 150 people in the community who would love to talk to an entrepreneur – tell them about your idea! Ask if there is anyone who it would be good for them to talk to. When you finally get to them you’re so much smarter than when you first started looking, so your idea will sound better. Part of the development of your pitch comes from the hustle of networking, and when the ideas is ready, it will sound ready.