The Back Story
The $4.5M Venture Capital like Series A raise by Glue Networks has received local press, and been press released on the web. But there is another story behind this, one that involves deal sourcing, the power of angel collaboration and the ability of angels to put sophisticated deals together. So here it is.
We first became of aware of Glue from a presentation they gave to the SARTA board in the spring of 2010 (by the way they are currently located in the SARTA VentureLab). They were looking for Venture Capital but we actively solicited them to look to the Sacramento Angels for funding. They did and an interest developed. After some due diligence we referred them to the Sierra Angels where further significant interest developed and more due diligence was undertaken. Other referrals were made and even more interest developed. Yet, Jeff Gray, the Glue CEO, like any good entrepreneur with a vision, still had his mind set on a larger raise than is typical for Angels.
The deal began to stall until the Sierra Angels established a connection to a significant pool of angel money. At that point, Jeff could see the possibility of raising his original goal of $4M and the Sierra Angels started working with Jeff on a set of terms for the investment. Once those terms were set it made it much easier for Jeff to go out and capture even more Angel groups until he exceeded his goal and ended up closing the financing round at $4.5M (update 03/15/2011: See another story on this deal on the Angel Capital Education Foundation Web Site).
Finally, Jeff has put together a great board, including a one member from each of the Sacramento and Sierra Angels, a tribute to their leadership in making this happen.
So every entrepreneur in the greater Sacrament region, including the entire I80 corridor, should see
- That Angels collectively do invest significant sums
- That Angels can do a VC-like deal
- Large deals require excellent collaboration amongst Angel groups, and especially with the entrepreneur
- Regional Angel groups collaborate on a regular basis.
- That the right companies can start, raise money, and thrive in the Sacramento region and along the I80 corridor
- SARTA can provide connectivity to an active investing community
And finally Federal and Local government officials take note: the Obama tax break (no capital gains tax) on investments prior the end of 2010 (since extended though) was a great incentive to Angels to invest.
