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Venture Capital and Start-ups

Published: July 26, 2016

Venture Capital and Start-ups

The Band of Angels office. Its modest look does not betray the fact that the Band of Angels has more than 150 members, has invested more than $231 million into 277+ companies since 1994, and the cumulative internal rate of return (IRR) is a positive 54 percent.

Faculty in Silicon Valley

Daily posts and photos from the ACM SAIL faculty seminar on Silicon Valley as an Innovation Ecosystem.

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Day 9 – Tuesday, July 19, 2016

Posted by Emily Chan, Associate Professor of Psychology, Colorado College

Today we went to the real “Shark Tank” — a pitch session at the venture capital organization Band of Angels.

You might be familiar with the reality show Shark Tank, where aspiring entrepreneurs present their pitches of new innovations and business ideas to judges (sharks) and hope one of them will “bite” and invest in the business venture. The reality TV show, with its theme music, rapid jump cuts, the sharks’ POV shot followed by swish pans, convey a foreboding sense of suspense for the imminent unfolding of a “make-or-break” decision for each contestant.

Shark Tank

Unlike the Shark Tank, our visit did not come with a soundtrack. We arrived at the conference room of the Band of Angels office in Menlo Park and seated ourselves in chairs against the side and back walls, while the angel investors — current and former tech executives who are interested in early stage investing in start-ups — took their seats at the board table.

There was no fanfare — a tray of grocery store sandwiches and a gallon of coffee were the only additions to a meeting that is purely business. It had the familiar feel of a dissertation defense.

Band of Angels

Individual and teams come in one by one — each pitch lasts for 10 minutes, followed by up to 15 minutes of intense Q&A.

After the innovator/presenter left the room, the ACM contingent had the rare opportunity to listen in on the confidential conversations between the potential investors. Not surprisingly, they talked about the long-shots and the financial risks inherent in start-up investments.

However, counter to the common stereotypes of the cut-throat venture capital world, the confidential conversations also included the discussion of the merits of sometimes taking on financially high-risk/low-payout investments because one could “do well by doing good.” In the investors’ eyes, these high-risk investments (e.g., an energy sector start-up in Ghana) might prompt socially-valuable technological and system breakthroughs. The payout can be more than what can be measured by dollar signs.

Can the shark tank be reimagined as a liberal arts space?

The answer is most certainly a “YES!” In case after case, we see the liberal arts in action: keen observation and creativity in identifying opportunities; excellent interdisciplinary research skills bringing together technical, operational, social, and ethical perspectives; grit to persevere when tackling  underdefined goals and questions; critical thinking, intercultural communication, and collaboration in seeking partners and backers for the venture.

So maybe, after all, it is a plausible sight to imagine ACM faculty in academic regalia, marching in the brisk Pacific wind to the steady beat of the Shark Tank theme.

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