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.
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 firstname.lastname@example.org
|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.|
|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.|
|$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|