KYCombinator Angels

Hello All,

I hope you all are having a wonderful holiday. Over the past few months I have been doing due diligence for Garrett French on his angel investment. I’m looking to expand the scope and include more Startups, more Angels, and start KYCombinator Angels. This is generally an information network; investments (if any) will be between the Angel and Startups.

Process

1. Due diligence virtual meeting with the startup (45 min - 90 mins) 

   1. Recorded (example recording of EZ Chow)

2. A deal review write-up (example write-up of Habit Halo)

   1. Founder receives an e-mail of the recording and write-up

   2. Angels receive a copy of the recording and write-up

3. Angels can reach out to the founder if interested

Why Start KYCombinator Angel?

We’re doing this for Louisville. All the cities immediately around us: Nashville, Indianapolis, Cincinnati, are growing faster. This isn’t the silver bullet but a step in the right direction.

Additionally, when I look over at Lexington (which is smaller with fewer resources compared to Louisville), they have better angel activity. I believe because they are better organized w/ Bluegrass Angels and Awesome Inc. I have this analogy called ‘Going Dutch’ referring to the 16th-17th Dutch empire. A tiny European nation was able to exert outsized worldly outcomes due to their ability to organize and leverage limited resources.

Why (for me)?

I spent my early adult years moving around a lot. I lived in 5 states, 6 cities; between my wife’s medical training and my career, we always moved. We moved about every 2 years. During the moves, we got married, started a family and now have 2 wonderful kids.

I moved to Louisville almost 3 years ago. My wife’s family is from here (to answer the “why here”). After shutting-down Affinna, I spent time looking at “where’s next?” The personal math for me has changed. Moves are “socially expensive”; my kids are in school, integrated with their friends, and they love where they are.

I have come to realize my home will be Louisville. And if this is going to be home, let’s make it a great home.

What’s Different about KYCombinator Angels?

There are a number of notable differences in KYCombinator Angels compared to other angel groups:

TIME TIME TIME. I’m not going to waste your time. Asking angels to come in once a month, sit for two hours and listen to 3-4 pitches is not an effective use of anyone’s time. I’ll conduct due diligence and record the meetings. I’ll also draft a deal review. You can consume on your own schedule.

Due Diligence. The value is not “gathering people,” that’s table stakes. The value is providing structure and synthesizing an opinion. In my report, I will always provide my opinion and recommendation.

I’m not going to educate you on angel investing. This is not a group that will walk you through what is a SAFE, convertible note etc.

High-Impact Angels. This group will be for high-impact angels. Too many angel groups optimize vanity metrics like membership count. We’re looking for people who can and will write checks. 

Desired Outcome

Kill the idea, not the founder. Increase velocity for founders.

I’ll be the first to say Louisville does not have a capital problem but a deal flow problem. Conversely, when I talk to startups they complain about “angel investing” as the root cause of their “lack of success;” The reality is that their idea is not good. 

My thesis is that there are three resources required for a great startup: capital, talent, founders.

Capital has and will continue to be highly fluid. The distance a founder is to Sand Hill gets shorter with time. Talent can be disaggregated, so long as there is a tolerance for remote work. That leaves founders as the keystone resource.

Double-clicking on founders. We have two options: develop existing founders or attract founders. I think attracting founders is a tough proposition. The POV for these founders is that Indy, Nashville, Cincinnati are better…if they’re even looking in the “rust belt” (i.e. they’re not looking at SF/NY/Austin).

We’re left with reality. We have to develop existing founders (and retain these founders). The two things I notice about this talent pool is:

• Cycle-time is slow -- 5 years and still MVP.

• Accretion and retention is low – Very few new founders, and there is a high propensity for founders/startups to move out.

The desired outcome is that we provide due diligence and angel feedback quicker to founders. If it’s a good idea, they can receive angel investment (and advice) faster. If it’s a bad idea, then hopefully that’s it. No more running around time for 3-4 months. It can be done in a day.

Benefit to Angels

Time. I’ll save you time. 

Privacy. You get access to startups without giving up your personal info. 

Scheduling. Access the information on your own schedule.

Benefit to Founders

Time. The founder does 1 interview instead of 10-20.

Transparency. The founder will be provided with a copy of the due diligence notes and video recording.

Access. The founder is indirectly communicating to a larger audience of angels.

Next Steps

I need your help! Let’s build a better, more exciting, more entrepreneurial Louisville. If you know someone who might be interested, please share. They can also register here: KYCombinator Angel Form

If you’re not interested, please reply. I’ll take you off the list.