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Two Boston-area high-tech angel investor groups are merging. Launchpad Venture Group, one of the region’s largest, and a newcomer, Race Point Capital LLC, will combine their membership, forming what may be the largest angel group in New England. The new entity will go by Launchpad for now but will look for a new name some time in 2011, said Launchpad director Hambleton Lord.
Race Point has about 22 members to Launchpad’s 60. Managing Director Chris Mirabile, a former CFO at IONA Technologies Inc., founded Race Point last fall and began gathering other wealthy individuals around a sidecar fund he’d raised with an unnamed limited partner. Mirabile himself has made 16 investments out of the fund; the group has participated in five of those.
Launchpad, meanwhile, founded in 2000, shortly after group angel investing began to take off in Boston. The group, led by Managing Director Hambleton Lord since 2002, has been averaging about five deals a year since about 2006, for an active portfolio of about 22 companies, Lord said. Lifetime, the group has made a total of about 30 investments.
The combined 80-member group will be larger than CommonAngels, which has 65 members.
With more capital around the table, the combined group will probably lead more deals, Lord said, adding that Launchpad currently leads about half the rounds it invests in.
Lord and Mirabile said their goal in the merger is to direct their angel-investor members into more active roles as advisers to portfolio companies. “The relationship begins in the diligence and becomes very intense in that period and then everybody breathes a sigh of relief when the check is written, and you drift a part a little bit,” Mirabile said. “That’s not really the way we think it should be.” Sharing administrative duties should help facilitate that, he said.
Lord said the aim is to improve angel investors’ attention to companies that have moved beyond the very earliest stages. He said Launchpad’s full value to startups is through access to the full network of investors. Individual members of the group can write checks quickly, he said, with the larger, slower-moving angel group adding to the round as the company moves forward. For example, this was the process Launchpad used with its recent investment in Copiun Inc., Lord said.
Although Race Point lasted only a little over a year as an independent, the merger should not be looked at as a larger group taking a fledgling under its wing, Mirabile said. “The fact that Race Point reached the size that it did in the time that it did – we were more than large enough to be viable. Six or more hundred thousand dollars invested since last April,” he said. “We’re really cruising, but Ham and I are spending a lot of our time duplicating effort. It just doesn’t make sense.”
Both Lord and Mirabile said the move reflects a bullish outlook on Boston’s high-tech startup industry. “We’re at a pretty exciting time here in Boston. I think activity is only increasing,” Lord said. “We think this is a great time to be an investor. We want to be active. We want companies to know they should be looking at us as a source of both financial and human capital.”
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