At 20, Investors' Circle Gets Its Groove Back

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At 20, Investors' Circle Gets Its Groove Back

Network investments in 2012 reach pre-recession levels
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At 20, Investors’ Circle Gets Its Groove Back by @impactIQ @investorscircle #impinv
Tuesday, October 16, 2012 - 5:00am

By David Bank -

Investor’s Circle, the 20-year-old network of mission-driven angel investors, has survived the long economic slowdown and a rough organizational patch and appears poised to have its best year since 2006.

That’s good news for social ventures, for whom early-stage capital remains tough to obtain, despite the new conventional wisdom around impact investing that there’s somehow “too much money” chasing too few investable deals.

It’s also testament to the enduring need for the kind of intensive, high-touch, relationship-based dealflow and due diligence that has been the hallmark of Investors’ Circle. For its 20th anniversary investors’ conference later this month, Investors’ Circle vetted 225 applicants, sent 60 ventures for review by its committee of seasoned investors and invited 12 to make their pitches from the stage. Another 25 will meet investors one-on-one in the conference showcase.

“Early stage investing — it’s still a contact sport. You need to see the people and kick the tires,” says Kenneth Merritt, a Vermont lawyer and angel investor who serves on Investors’ Circle board. “It’s not something you can see on the Internet, click the button, and write a check for $25,000 or $50,000.”

So far this year, Investors’ Circle members have invested $4.73 million in 17 deals. With the fall venture fair still to come, “We are optimistic that IC will invest close to $10 million this year,” says Justin Desrosiers, IC’s director of strategy and operations. In its two decades, Investors’ Circle claims to have facilitated investments of $152 million in 255 enterprises and funds that have attracted $4 billion in follow-on financing to tackle challenges in the environment, education, health, and community development. Notable ventures backed by IC members include Zipcar, Niman Ranch and groSolar.

Investors’ Circle’s dealflow in the first half of 2012 was enough to make it one of the most active angel networks in the country – impact or not – according to the Halo Report, a regular update published by Silicon Valley Bank and the Angel Resource Institute. That put it alongside dedicated tech and healthcare-related angel groups such as Sand Hill Angels in Silicon Valley, and Launchpad Venture Group in Boston, though those groups still put more money to work.

The improving economy, or at least the promise of same, is a major factor in IC’s resurgence. The network invested a record $13 million in 2005, but activity dropped off the cliff in 2008 as the financial crisis hit hard. Sponsorship dollars dried up as well, which forced cuts in spending for member development, events and other services, which depressed investing activity further.

The downward spiral led Investors’ Circle to broker a rare nonprofit merger last year with the SJF Institute, the nonprofit affiliate of SJF Ventures, the Durham, N.C. investors in sustainability and tech-enhanced services to create positive community and environmental benefits.

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David Bank
Keywords: Finance & Socially Responsible Investment | Angel Investing | Business & Trade | Energy | Environment & Climate Change | Ethical Production & Consumption | Events, Conferences & Webinars | Finance | Health | Social Entrepreneurship | impact investing