Angel Investors Are the Bedrock of The Startup Universe
Plus, opportunities for angel investors this week, and consumer trends
Welcome to Changemaker Ventures! For those of you who are new here, I’m Maria, an Investor at Madrona Venture Group, a Seattle-based venture capital firm that has been an early partner with companies like Amazon, Redfin, Rover, Smartsheet, Apptio, and Snowflake. Through Changemaker Ventures, I’ll be sharing bi-weekly news about technology and venture capital in the Pacific Northwest. As well as deep dives into the intersections of people and technology. I’ll be writing about Web3 as a new layer of the internet, living in the metaverse, internet culture, next-gen consumer brands, change-making ways of leveraging data & AI, and how computation is changing the world.
Angels are the foundation of tech ✨
Despite shifts in the broader venture capital ecosystem and public market over the past quarter, angel investors continue to be the base of future tech innovation. Reflecting on past year, the venture ecosystem has grown significantly with an increased amount of capital and number of deals happening at a rapid pace. According to Pitchbook, US VC-backed companies raised a record $329.6B in 2021, almost double the previous record of $116.6B raised in 2020. In Seattle, the 2021 deal count was 494, a 134.2% YoY increase from 2020. Deal value was $8.0B, a 171.2% YoY growth. The investment activity for angel, Seed, early, and late-state companies all hit record highs in terms of both total dollars invested and total deal count, with angel investors being encouraged to do diligence and deploy capital at an increasing rate.
Q1 2022 was the most active quarter ever in AngelList's history in terms of fundraises and exits, which showed early-stage VC and angel investing has continued at a record speed. Angel investments are likely less impacted by market volatility because early-stage startups are several years away from exiting.
According to Fast Company FAANG tech workers are fleeing their jobs to work at Web3 startups. As we enter a bear market, it is an optimal time for people thinking about building a company to potentially dive into building that company fulltime. This makes angel investors ever more critical to the future of the technology ecosystem. Often angel investors are the first to write checks into startups. Venture capitalists look to angel investors to benefit from their operating experience and their networks. While a small slice of total investment dollars come from angels, they frequently play crucial roles in a company’s development that goes far beyond an initial capital allocation.
With an increasing number of tech employees interested in becoming angel investors, I thought I would put together a list of resources for angel investors in the PNW. This list is not exhaustive, and if there is something I should add, please send me a DM on Twitter!
😇 6/14 Seattle event for angel investors: At MVG we are hosting our annual angel investor gathering. Send me a message if you would like to attend the event.
😇 PNW angel investor directory: If you are a founder looking for local PNW angel investors, check out this directory. If you would like to be added to the directory, fill out this form.
😇 TiE Seattle: TiE Seattle is a network of entrepreneurs and executives with the mission of supporting and promoting entrepreneurship in the Greater Seattle area. The TiE Angel Group evaluates hundreds of startups each year.
😇 Alliance of Angels: AoA is the largest and most active angel group in the Pacific Northwest. Each year, angels work together to invest in 20+ companies.
😇 E8: E8 is a Seattle-based member organization of angel investors focused on early-stage cleantech companies whose innovation will increase the sustainability and health of our planet.
😇 Grubstakes: Grubstakes is a group of 50+ angel investors in Seattle that fund and mentor startups in the Pacific Northwest.
😇 On Deck Angels: Looking to learn how to angel invest? On Deck Angels is a global community of angel investors combined with a curriculum to refine your investing craft.
😇 Hustle Fund Angel Squad: Aspiring angel investors can join a Hustle Fund Angel Squad to learn how to invest into early startups.
Weekly consumer & tech trends 👀
👗 Rental is back: Rent the Runway has benefited from the return to weddings, travel, and working in the office. Last week, Rent the Runway reported 82% YoY subscriber growth.
🌐 AI is changing commerce: Pinterest is entering AI-driven shopping by acquiring The Yes. Pinterest’s vision is to be the home of taste-driven shopping. Pinterest and The Yes share a vision of leveraging AI to create a personalized commerce experience.
🛒 Shifting consumer purchasing behavior: Brands and retailers continue to struggle matching supply with demand. Two years ago, the pandemic completely disrupted consumer demand and retailers had to manage complex global supply chains during a global pandemic. Retailers benefited from government stimulus checks, but now they are facing a reversal with consumers spending less on goods in favor of services such as food and gas. Target is facing high inventory levels for less desired items and is now canceling orders and warning of profit drop offs.
📚 Gen Z is less interested in a 4-year college degree: The great resignation, increase in consumer technology, and rise of student loan debt has made Gen Z less interested in a 4-year college degree. Younger generations are exploring different education and career paths.
🎵 Spotify is about to change the book publishing opportunity: Spotify is entering the audiobook business. The company is introducing an ad-model to an industry that has relied on single-book purchases and subscriptions.
Maria, I am curious to hear your thoughts about auto-completion for size as an e-commerce experience trend. There is a startup that currently offers the tool for Everlane.com and it seems like a game changer. -Attila