Angels in the Infrastructure

Not long ago, Innovation Works announced the selection of a new manager to run a regional angel investment fund, to be called Pittsburgh Early Growth Partners. $2 million in seed money has been committed by an impressive consortium of investors. Harold Miller's post on the news appears here. The Fund will do what angel funds do: find and fund promising new companies.

This is fine news. I'm hoping for more, and I'm hoping for better. The "more" is more money, which everyone would like to see. The "better" is new models of investing.

Is there a way to leverage local investments to grow the region, as well as individual companies? Here's an example: Angels in Boulder, Colorado have launched TechStars, a fund the provides early stage seed money to new companies -- and that is specifically designed to attract new entrepreneurial talent from outside the region. Come to Boulder, get some seed money (i.e., financial capital), get some "bootcamp" style training and advice (there's a long list of local entrepreneurial mentors involved) (i.e., human capital), and hopefully stick around for the long term. More details here.

Is a similar model workable for Pittsburgh? This is a different kind of return-on-investment; it's community building, not necessarily cash. TechStars may be giving away a lot of what they have to offer: TS kicks in a lot of time, a little money, and a shot at more money down the road via access to next-level funders. TS takes equity, but it doesn't necessary stake a claim to conversion rights or preemption rights or nondilutive status or liquidation preferences or even board seats -- things that are often standard in VC deals, things that are often needed to calculate whether a deal is worthwhile. Those are also things that put off a lot of entrepreneurs. If you give it away, will they come? And will they stick around? And will the tech community be better off overall in the long run, even if the investors themselves don't reap direct benefits? That's the bet.

TechStars isn't an entirely new idea, but it could be new to Pittsburgh. The Pittsburgh business community might have to think outside the box in order to embrace it, but thinking outside the box often pays off. It's worth some thought.


0 Responses to "Angels in the Infrastructure"

Search Pittsblog

About Pittsblog

Pittsblog 2.0 is written by Mike Madison, a law professor at the University of Pittsburgh. Send email to michael.j.madison[at] Mike also blogs at, on law and technology. Chris Briem of Null Space drops by from time to time.

All opinions expressed at Pittsblog 2.0 are those of their respective authors and of no one (and no thing) else, least of all the University of Pittsburgh.

Pittsblog 2.0 has a motto: "It's steel good in Pittsburgh." Say it aloud, with a Pittsburgh accent.

Comments are moderated.
Subscribe to Pittsblog comments


Blog Archive

Header Background

Header background images licensed from (left image) lemonad and (right image) plaskota under Creative Commons Attribution - Noncommercial - Share Alike 2.0 Generic licenses.


Copyright 2003-2010 Michael J. Madison - WP Theme by Brian Gardner - Blogger Blog Templates,