David Perla, co-founder and co-CEO of Pangea3, the largest legal-process outsourcing provider worldwide, with more than 1,000 employees globally, is a typical angel CEO. Perla, 43, funds an average of two startups per year, investing about $50,000 per transaction. In valuation, the startups tend to be in the $2 million to $4 million range. While he takes a definite interest in the startups, he makes it clear to the founders that his first responsibility is to Pangea3 and they can’t expect him to be on call for routine coaching. “Managing founder expectations is key,” he says.
Perla describes the funds he sets aside for angel investing as discretionary. “This money is not part of my kids’ college fund or my own retirement planning,” he says. “If you take losing money personally, stay away from angel investing.” Diversification is the key to success in any investing program; and with just four startups in the typical CEO angel’s portfolio, meaningful diversification is impossible. Perla suggests that CEOs who want to maximize their odds should consider participating in a VC fund.
“Assume you are going to lose all your money,” agrees Manuel Henriquez, founder and CEO of NYSE-listed Hercules Technology Growth Capital, a specialty financing company that provides debt financing to pre-IPO, venture-backed companies. “Treat success as a complete surprise. The law of small numbers will likely lead to a complete loss on your investments,” he says. “I’m happy to come back at the end of the day at net zero.”
CEOs considering making an angel investment should answer one central question: What’s in it for me? If the answer focuses on what you will receive, you should buy an index fund, suggests New York Angels chairman Cohen. “On the other hand, CEOs who are willing to give first and receive second will be rewarded by organizational wisdom and market insights that will improve their game as CEOs to the organizations they lead,” he adds.
Jacqueline Corbelli, co-founder and CEO of BrightLine, a provider of interactive television solutions for entertainment and advertising, invests in a handful of opportunities every year, typically hearing two dozen pitches before selecting one in which to invest. Corbelli is typical of CEO angels in that she invests less for the monetary return than the charge she gets from ideas that offer new ways to transform an industry through digital technology.
“The marketplace is struggling with the opportunity to jump to a whole new level by utilizing digital technologies,” Corbelli says. “I’ve watched businesses get transformed when they make a deliberate and focused effort to leverage technologies. I look for people who get that and I want to invest in them,” she says. While she does due diligence on the startups, she recognizes that, given the early-stage nature of the businesses, due diligence really comes down to the CEO angel’s instincts. “I want to invest in people who are smarter than me in the area they are investing in,” she says.
Hercules Technology Growth Capital’s Henriquez is a CEO angel investor because he likes being involved with bright young people dedicated to changing the world. “True fishermen cast their lines not because they want the fish, but because they like fishing,” he says. “It’s fascinating to help spawn new technologies, to challenge the status quo; it’s what this country is all about and angel investing allows me to be a small part of it.”
Chief Executive Group exists to improve the performance of U.S. CEOs, senior executives and public-company directors, helping you grow your companies, build your communities and strengthen society. Learn more at chiefexecutivegroup.com.
0
1:00 - 5:00 pm
Over 70% of Executives Surveyed Agree: Many Strategic Planning Efforts Lack Systematic Approach Tips for Enhancing Your Strategic Planning Process
Executives expressed frustration with their current strategic planning process. Issues include:
Steve Rutan and Denise Harrison have put together an afternoon workshop that will provide the tools you need to address these concerns. They have worked with hundreds of executives to develop a systematic approach that will enable your team to make better decisions during strategic planning. Steve and Denise will walk you through exercises for prioritizing your lists and steps that will reset and reinvigorate your process. This will be a hands-on workshop that will enable you to think about your business as you use the tools that are being presented. If you are ready for a Strategic Planning tune-up, select this workshop in your registration form. The additional fee of $695 will be added to your total.
2:00 - 5:00 pm
Female leaders face the same issues all leaders do, but they often face additional challenges too. In this peer session, we will facilitate a discussion of best practices and how to overcome common barriers to help women leaders be more effective within and outside their organizations.
Limited space available.
10:30 - 5:00 pm
General’s Retreat at Hermitage Golf Course
Sponsored by UBS
General’s Retreat, built in 1986 with architect Gary Roger Baird, has been voted the “Best Golf Course in Nashville” and is a “must play” when visiting the Nashville, Tennessee area. With the beautiful setting along the Cumberland River, golfers of all capabilities will thoroughly enjoy the golf, scenery and hospitality.
The golf outing fee includes transportation to and from the hotel, greens/cart fees, use of practice facilities, and boxed lunch. The bus will leave the hotel at 10:30 am for a noon shotgun start and return to the hotel after the cocktail reception following the completion of the round.
