If you haven't been following the series of posts, let me quickly recap. The Seattle Angel Conference has pulled 33 investors into a room over a few weeks to sift through 43 companies and ultimately pick 1 company to invest their combined $165,000. The first round the investors picked the top 30 companies they were collectively interested in, then each of those companies presented a 3min pitch in the quarterfinals. Of those 30 companies in the quarterfinals the investors need to narrow the group to 12 semifinalists, then 6 finalists to present at the actual conference on May 16th. I believe there are still tickets to the May 16th event.
When the group of investors piled into the Davis Wright Tremain conference room for the quarterfinal cut meeting, the energy was pretty high. People were anxious to defend their favorite companies and fight to cut the companies they liked the least. As the meeting got started it was obvious that everyone had an opinion about the companies and most people just wanted to get their opinions out in the open. They had a side conversation with a CEO and they really wanted to relay what the CEO said or they researched the patent and thought it was good or bad. Most of the thoughts people were putting out in the open were just that though, thoughts to get out in the open and weren't a complete story of why someone should or shouldn't invest in one of those companies.
The obvious lack of focus around why someone should invest in one of the companies opened the conversation up to what the group investment thesis was or if the group as a whole should even have an investment thesis. I would love to sit around all day and talk about what an investment thesis should contain, at the end of the day though it is less important for all 33 investors to be investing for the exact same reason. It is more important that the reasons each of the investors is investing begin to point to the single best company out of the group or potential companies.
The need to skip building complete consensus and simply get to picking the best companies began to take over the meeting. John led the group through the discussion and into an array of different votes to help refine which companies the group loved for whatever reason or didn't like for whatever reason. This focus on group selection was a somewhat democratic process and we quickly picked the top four, then dropped the bottom eight. Between a few companies leaving on their own after the quarterfinals and dropping the last eight we were already down to 17 potential companies and we really only needed to cut the list to 12.
With only five more companies to cut, it was obvious there were a few companies that the group was unsure about so the opinion voicing started again. Some about the companies themselves, some about the potential for an exit, and one interesting comment about the relatively small amount of money each investor was investing means that we should all be picking a company that was shooting for the moon.
At the end of the day, there was one company that I liked in the quarterfinals and after the group discussion I abandoned them. I'm sure the same thing happened for a lot of the other investors. As the voting resumed... pick your top three favorite, pick your single favorite, etc. The group began to abandon companies for good reasons or due to crowd participation. At any rate, we did finally get to 12 companies that would be coming in to present again for 10 minutes each. The 12 that made it to the semi-finals was a great group and now the investors were a little more primed with what types of information may influence the group at the semi-final cut meeting.
Personally, I took a liking to one of the companies as I thought their strategy was pretty good and their team seemed to have the right background. I set aside some time to do a little research ahead of their 10min pitch. In the next post (next Monday) in the Seattle Angel Conference III series, I'll post on the two sets of ten minute pitches in the semifinals.