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Originally published Monday, January 29, 2007 at 12:00 AM

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Angels group invested $5.8 million in '06

A group of Seattle-area angel investors plans to announce today that it funded more fledgling companies last year than in any other period...

Seattle Times technology reporter

A group of Seattle-area angel investors plans to announce today that it funded more fledgling companies last year than in any other period in the organization's 10-year history.

The Alliance of Angels said that in 2006 the organization invested $5.8 million in 31 companies. Of those startups, 11 received a follow-on investment, meaning they had received money from the membership in the past.

In 2005, fewer companies received a record-breaking $7 million. The 2005 numbers were skewed by two of the 21 companies receiving about half of the total invested.

The Alliance of Angels was started in 1997 by the state's Technology Alliance to help promote a high-tech economy.

Today, the 100-member organization is made up of wealthy individuals and professional venture capitalists who gather monthly to listen to companies make a pitch and decide whether to invest individually.

"No deal dominated [in 2006]," said Dan Rosen, an individual investor and alliance chairman. "We tended to put measured amounts of money in each company."

The figures represent only investments made by the alliance's membership, but it can be used as a gauge to assess the broader early-stage investment market. Other investment groups in town include Puget Sound Venture Club and Seraph Capital Forum, but many angels act independently.

The companies that received funding from the alliance in 2006 were picked from a pool of about 200 applicants.

The process includes an initial application, a two-hour interview, and a presentation in front of a screening committee, which chooses three or four companies that make presentations before the membership each month.

Some of the companies that received funding in 2006 include Pritest, a Redmond company developing a test for tuberculosis; Pluggd, a Seattle company creating a way for Internet users to find video and audio; Modumetal, a Seattle-based nanotech company; Dry Soda, a Seattle beverage maker; and Zero Crossing, a Redmond company integrating technology into traditional musical instruments.

About three-fourths of the presenters are technology companies, while the rest are mostly consumer or retail goods companies, said Rebecca Lowell, the alliance's program manager.

Lowell; Geoff Entress, a principal at Madrona Venture Group and alliance volunteer; and Rosen said 2006 could be characterized by several trends: Of companies that submitted plans, more involved wireless technology, and companies that considered themselves Web 2.0 enterprises budgeted zero dollars for marketing because they said word about them would be passed along virally.

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They also noticed companies consistently said they were worth more than startups typically are at that stage.

Lowell said those kinks are usually worked out; the alliance offers a "Pitch Clinic" every other month to help companies refine their message.

Still, the rigorous screening process has served the alliance well, Lowell said.

Of the companies funded by the alliance in the past three years, all are still in business today and half have received more funding -- either from alliance members or venture capitalists.

Tricia Duryee: 206-464-3283 or tduryee@seattletimes.com

 
Alliance investments
The Alliance of Angels has helped more than 120 companies with funding since the group's inception. Last year, its membership funded more companies than at any point in the organization's history.
Year Deal Amount
1998 8 deals $1.5M
1999 15 deals $4.3M
2000 12 deals $3.1M
2001 10 deals $1.7M
2002 6 deals $1M
2003 8 deals $3M
2004 9 deals $4M
2005 21 deals $7M
2006 31 deals $5.8M
Source: Alliance of Angels

 

 

 
Washington state venture investments, fourth quarter 2006
Software and health and medical companies led the way in receiving more than $260 million in investments in the quarter.
Company City Industry Amount Business description Investors
Imperium Renewables Seattle Industrial/

energy

$43,000,000 Provides renewable fuels. Nth Power, Technology Partners, undisclosed investor
Calypso Medical Technologies Seattle Medical devices and equipment 42,200,200 Develops medical devices for cancer therapy. Frazier Healthcare and Technology Ventures, Integra Ventures, Kaiser Permanente Ventures, Merlin BioMed Group, Pequot Capital Management, RiverVest Venture Partners , UV Partners, undisclosed investor, Versant Ventures
Medio Systems Seattle Software 28,050,000 Develops Internet search-engine software for mobile devices. Accel Partners, Frazier Healthcare and Technology Ventures, Mohr Davidow Ventures, Trilogy Equity Partners, undisclosed venture firm
Pathway Medical Technologies Redmond Medical devices and equipment 25,222,000 Develops medical devices to treat arterial disease. ABN AMRO Capital, Giza Venture Capital, HLM Venture Partners, Latterell Venture Partners, Oxford Bioscience Partners, undisclosed venture firm
Talyst Bellevue Software 20,000,000 Provides automation systems to hospitals and pharmacies. Ignition Partners, OVP Venture Partners
SourceCode Technology Holdings Redmond Software 11,250,000 Develops and distributes software applications. Azure Capital Partners, Financial Technology Ventures, Treacle Venture Partners
BioPassword Issaquah Software 11,000,100 Develops software to secure access to data. Benaroya Capital, Citrix Systems, Ignition Partners, OVP Venture Partners, RRE Ventures
Sur La Table Seattle Consumer products and services 10,968,000 Manufactures kitchenware and tabletop accessories. Freeman Spogli
HyperQuality Seattle Business products and services 10,000,100 Audits phone calls, e-mail and chat communications. Divergent Ventures, Ignition Partners, Miramar Venture Partners , Rustic Canyon Partners
Undisclosed company Seattle Biotechnology 10,000,000 Undisclosed Undisclosed venture firm
SourceLabs Seattle IT services 6,999,900 Provides software integration, testing, support and maintenance services. Ignition Partners, Index Ventures Management, Madrona Venture Group
Headsprout Seattle Media and entertainment 4,500,000 Provides computer-based learning programs for children. Roser Ventures, undisclosed venture firm
Ontela Seattle Software 4,000,000 Develops mobile imaging technologies. Hunt Ventures, Oak Investment Partners, Voyager Capital
GotVoice Kirkland Telecommunications 3,791,000 Provides voice-messaging technology. Ignition Partners, Second Avenue Partners
Blue Heron Biotechnology Bothell Biotechnology 3,675,000 Provides gene-synthesis services. Crabtree Ventures, Integra Ventures, undisclosed investor
Geospiza Seattle Software 3,000,000 Develops software for automating genetic testing. Undisclosed venture firm
Seatab Software Bellevue Software 3,000,000 Provides software for small and medium-size businesses. Trident Capital
NeuroTherapeutics Pharma Seattle Biotechnology 2,500,000 Develops therapies for CNS disorders with an initial focus on epilepsy. Thomas, McNerney & Partners, undisclosed venture firm
Broadstream Communications Bellevue Media and entertainment 2,300,000 Provides technology related to IPTV. Benaroya Capital, undisclosed investor
Escapia Seattle Software 2,000,000 Provides software and services for vacation rental agencies. Buerk Dale Victor, undisclosed individuals
MessageGate Bellevue Software 1,545,000 Provides messaging security and compliance software for businesses. Polaris Venture Partners
Intelligent Results Bellevue Software 1,500,000 Develops analytics software. OVP Venture Partners, undisclosed venture firm
Koronis Pharmaceuticals Redmond Biotechnology 1,494,000 Develops technologies to prevent and treat viral diseases. Pacific Horizon Ventures
Data Depth Issaquah IT services 1,290,000 Operates as developer of copyright platform. Rustic Canyon Partners
Chelsey Henry Seattle Consumer products and services 1,200,000 Manufactures handbags and accessories. Keiretsu Forum
Cdigix Seattle Media and entertainment 1,031,000 Provides digital media services to colleges. Meritage Private Equity Funds
Jott Networks Seattle Telecommunications 999,900 Operates as voice-to-text translation service. Ackerley Partners, Draper Richards, undisclosed individuals
Ikaria Seattle Biotechnology 762,000 Develops products based on reversible metabolic control. Arch Venture Partners, Venrock Associates
Open Interface North America Seattle Telecommunications 750,000 Provides embedded software enabling consumer Bluetooth applications. Benaroya Capital, undisclosed venture firm
Local Marketers Seattle IT services 600,000 Provides online marketing services. Madrona Venture Group
Pulsar Vascular Seattle Medical devices and equipment 600,000 Operates as a medical-device company. Sanderling Ventures
Vanson Halo Source Bothell Medical devices and equipment 500,000 Provides solutions to health and hygiene problems. Alexander Hutton Venture Partners
NetUpdate Bellevue Financial services 340,000 Provides online software for mortgage-industry transactions. Alexander Hutton Venture Partners
Insitu Group Bingen Industrial/energy 250,000 Develops long-range, unmanned and autonomous aircraft. Battery Ventures
ShipLogix Seattle Retailing/distribution 150,000 Develops a Web-based transportation-management system. Alexander Hutton Venture Partners
Source: PricewaterhouseCoopers/Thomson Financial/National Venture Capital Association MoneyTree Report

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