The Boston-born PayPal StartTank company Launch Angels has serious plans to shake up "Old World" investment practices with its equity crowdfunding-focused model. And as of Tuesday, the startup has proof of those plans in action. Launch Angels, which focuses on creating funds for affiliated groups of angels, announced that the WHERE Angels Fund inked its initial investment – and has another three deals on the way.
“Crowdfunding is really having an effect on the venture capital space, specifically. For certain sizes of raises and for certain companies that don’t fit the stereotypical mold, it’s been a really good point of access to just get ideas out there,” Shereen Shermak, Launch Angels founder and CEO, told BostInno.
The recipient of the WAF’s first investment, Klymit, proves Shermak’s point. Based in Ogden, Utah, the company is best known for its use of NobleTek™ argon gas insulation in outdoor gear and apparel. Klymit led a successful Kickstarter back in the fall of 2012, beating their fundraising goal and landing more than $50,000 for their technology.
Launch Angels discovered Klymit via equity crowdfunding site CircleUp, on which the company was raising its Series B round. WAF participated in the round offered through the site, contributing an undisclosed sum to the company. But this is just the beginning: Another trio of WAF deals are being finalized, as the fund strives to balance the portfolio between high-tech and high-touch startups.
Launch Angels CEO Shermak noted in a statement:
This investment is a major milestone for the company. Our process is turning up exciting deals, the committee is fully engaged and the WAF investors are deeply interested. We originally projected investing the Fund over a period of 12 to 18 months. Given the deal flow we’re seeing, I suspect we might fully invest before then.
The group responsible for sourcing said deals is the WAF Investment Committee, a stacked team run by Shermak and composed of seasoned entrepreneurs and financial advisors, including: Michael Collins, CEO of Bedford, Mass.-based Big Idea Group; George d’Arbeloff, CEO of Bin1 ATE; Sandy Posa, a startup advisor and former vice president of Procter & Gamble; Michael Antino, CEO of Merchant Media; William Conrad, Managing Director of Baldwin & Clarke Corporate Finance; Kevin McClintock, an investment management veteran; and Arthur Fox, a royalty-based venture finance expert.
Back in January, the firm signed off on its first in a series of $1 million funds from individuals tied to the PayPal-acquired WHERE Inc. to create the WAF. Among the WHERE veterans taking part in Launch Angels’ fund are PayPal Media Network's David Chang and Sarah Hodkinson, who is new to angel investing. Shared Hodkinson:
Traditionally, I’ve been very conservative ... granted, [angel investing] is kind of risky, but the model Shereen has put together I think really mitigates the risk, because we are pulling resources together and spreading it across a number of different companies.
The opportunity to help foster development of these early stage companies, create jobs and grow the opportunity here in Boston are all very important. And as former startup employees ourselves, that’s something we’re all very passionate about.
Just as the WAF deal selection gets underway, two more Launch Angels Funds are accepting investors. The Early Traction Fund looks for early-stage companies with a revenue track record, whereas the women-led fund targets women-led, women-backed and women-focused companies. Earlier this month, Launch Angels held an event at PayPal on women in capital in hopes of bringing more female investors into the fold.
