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Angel investors are forming two new groups in Boston, with the aim of pushing more wealthy individuals into fields where private investors typically fear to tread. Neither effort has a name yet, but both are led by former information technology and energy executives who are well known as angel investors already.
Reed Sturtevant, a serial entrepreneur and former director of Microsoft Corp.’s (Nasdaq: MSFT) Startup Labs, is launching what he is calling a “startup accelerator” for new companies seeking high-risk seed investments at the very early stage.
Meanwhile, former NStar (NYSE: NST) CIO Gene Zimon has formed an angel group aimed at encouraging private investment in supply-side energy technologies. These companies are seen as difficult for angels, because they can be capital-intensive and slow to mature.
“There’s no group where we can really talk about potential investments in clean energy and related things like the smart grid and utilities,” said Zimon, who is already a member of Walnut Venture Associates and Launchpad Venture Group, two established Boston-area groups of angel investors.
Clean energy investing has captured the interest of VC firms, but has proved difficult for the kinds of individuals — often health care or information technology entrepreneurs with past successes — who typically make up angel groups, Zimon said. “They don’t understand a lot of the details. Some of the customer-facing stuff is all right, but some of the infrastructure stuff, the communications, there’s not that much interest.”
Zimon, who retired last July from NStar, said he believes he can bring together angels who not only can make such investments, but can vet opportunities for mainstream angel groups. The group, which is tentatively calling itself Cleantech Angel Group, has a list of about eight other participants, including Nick d’Arbeloff, executive director of the New England Clean Energy Council; and Alok Prasad, chairman of the TiE Boston CXO Forum.
Sturtevant, who left Startup Labs in October, shortly before Microsoft wound down the Cambridge technology incubator, is working on his plan for a startup accelerator with former Startup Labs senior product director Katie Rae. The two also worked together at Eons Inc., the baby boomer online social network launched in 2006 by Monster Worldwide Inc. founder Jeff Taylor.
Sturtevant declined to discuss their plans in detail, but said the group will focus on a perceived funding gap for startups at the earliest stage.
“There is a funding gap between that moment when a startup is just a gleam in a founder’s eye and the Series A financing,” Sturtevant wrote in an e-mail.
Jon Pierce, founder of Betahouse, a Cambridge startup co-working center, agrees. In June, he’s planning to host an Angel Boot Camp to coach timid angels on the ins and outs of early-stage startups.
“It’s a high-risk investment. Most startups fail,” Pierce said — but the successes tend to spawn wealthy individuals ready to invest in the next round of good ideas. “Until you have a few of those successes, it’s hard to get into that virtuous cycle,” he said. “That’s where we want to be.”
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