Seed Capital From Angel Investors: Nicola Corzine, Band of Angels Acorn Fund (Part 4)

By guest author Irina Patterson

Irina: Do you invest in teams straight out of school, or do you require previous business experience?

Nicola: One of the great reasons to work with the Band of Angels at large is the network we bring to the table. It is not just the ability to inject money and sort of walk away and hope for the best; it is having access to some of the most successful angel investors in the United States, who are part of our group. And these are guys who are hungrily and actively looking to make a difference in the investments that they personally adhere to, so at the Band of Angels we have over 120 seasoned senior executives with very nice Rolodexes who suddenly have the ability to open doors for startups that might otherwise not be able to get those first marquee customers.

Irina: What is your perfect deal?

Nicola: If we would define a perfect target deal for us, the one that is more likely to get investment from the Acorn Fund is going to be the company that has an acquisition strategy three years out. That means dividends or IPOs would be less favorable to us at this stage. It is because of the amount of money it takes to build these businesses. Remember that the Acorn Fund will not do the follow-up investments, so the only way we can make a healthy return is by knowing that our single round of financing is going to be able to be liquidated within the time frame that we specified.

Irina: What is your preferred investment type?

Nicola: Series A Preferred Stock.

Irina: Do you do debt financing?

Nicola: No, we prefer not to do debt financing.

I must say, we really target early acquisition opportunities with the Acorn Fund. That doesn’t mean that if the right opportunity presented itself and there is the ability for that startup to go public or to acquire other companies in the space that we would not look reasonably on it. But we think that with the awful amount of destruction going on during the first year or two of the life of a startup, what we are hoping for is dedication to a committed strategy from day one. Even if at the end of the day we believe the strategy may change, we want everyone committed to that strategy so that we know what we are working toward, that there is a common goal everyone is aligned behind.

This segment is part 4 in the series : Seed Capital From Angel Investors: Nicola Corzine, Band of Angels Acorn Fund
1 2 3 4 5