Angel Interviews: Ehud Israel and the “funding gap” at Drexel University

Introducing Angel Interviews, a series dedicated to debunking the assumption that entrepreneurs need to look outside of Philadelphia for angel and early stage investment. Every so often we’ll interview a local angel and ask him or her about investment criteria and how to get in contact. If you’re an angel investor that deals primarily with technology companies or you have any suggestions about how we can improve this series drop us a line.

Ehud Israel wasted no time admitting that he was new to angel investing.

The 43-year-old is one of the mentors at Drexel’s Baiada Center for Entrepreneurship, a business incubator that caters exclusively to the Drexel University community, and it was in that role that he decided to invest in one of the Center’s companies: Async Interview.

“There’s a gap in our support [at the Center] of the students in respect to funding, so I’ve been trying to fill that gap,” says Israel. “It just so happens that, as a mentor, I’m in the ground floor at these ideas.”

Now in an operational role at as Async’s CFO and CTO, Israel has also invested in one other company and is keeping his ears open for other deals, though he says he is not actively pursuing companies.

We ask Israel what he looks for in a company, how to get started as an angel investor and the reason for the misperceptions about Philadelphia’s angel community.

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Osage Ventures to partner with research universities like Penn to bolster IP profit

The New York Times profiles the new Osage University Partners fund, which partners venture capitalists and universities to benefit both in high yield research-fed, intellectual property-driven startup businesses:

Investing in start-ups is the business of venture capitalists, some of whom have come up with a new formula for profits. It goes roughly like this: Give a few V.C.’s access to the technology deals. Let them raise some capital and invest it shrewdly. The V.C.’s become rich. And if the deals are done correctly, the schools share handsomely in the riches. As an incidental but significant benefit, it’s at least possible that venture capitalists, working with universities, could help create manufacturing jobs in the United States.

Can You Really Build a Great Tech Firm Outside Silicon Valley? | Both Sides of the Table

Perspective from a Los Angeles entrepreneur as posted on TechCrunch:

Last year I was on Sand Hill Road in Silicon Valley meeting with one of the most prominent venture capital firms in the country.

We were talking about a company, Factual (disclosure my firm is an investor), which was founded by one of LA’s most talented Internet entrepreneurs, Gil Elbaz, who as co-founder of Applied Semantics (purchased by pre-IPO Google for $102 million and now Google AdSense) is responsible for a large portion of the Internet’s monetization.

The VC partner, somebody I greatly respect said, “Yeah, we like Gil and what they’re doing. I’m just not sure you can build a great technology firm outside of Bay Area.”

via Can You Really Build a Great Tech Firm Outside Silicon Valley? | Both Sides of the Table.

Rob McCord, Pennsylvania state treasurer: Philly is one of country’s two best low-cost entrepreneurship spots

Rob McCord, your Pennsylvania state treasurer, wants you to have empathy for him.

Just about the highest ranking Democrat in state politics has an easy laugh and a friendly manner. But, he says, if you’re going to describe him, you ought to start first with his entrepreneurship, and entrepreneurs ought to stick together.

Since 1994, McCord, 51, served as a senior executive at Safeguard Scientifics and founded the Eastern Technology Fund. He co-founded Pennsylvania Early Stage Partners and, from 1996 to 2007, he led the Eastern Technology Council [Official bio here].

He’s a venture capitalist in background, a Harvard kid and a Wharton grad by education and now he’s in his first term safeguarding $120 billion in public funds. In that role, McCord is offering the office up to his base –  whom he describes as “job-creating, technology-orientated entrepreneurs”– for advising, investing and as a potential client.

If nothing else, he thinks the Philadelphia technology community ought to know who he is. If only because he grew up on the Main Line, invested in tech businesses here and, well, because when it comes to statewide representation, Philadelphia could use a friend.

Fortunately, McCord is swearing by the position for now, despite prognostications to the contrary that suggest he is a sure bet to run for governor.

“I love being treasurer. People who watch me will know, it looks a lot more fun to be treasurer than in Congress, which was another option,” McCord told Technically Philly. “I plan to run for reelection [in 2012], and I do not take it for granted. So I’m obsessively focused on the treasurer’s office.”

In between calls on his Blackberry, McCord met with Technically Philly in a crowded Cosi in Bryn Mawr to talk his background, how he could have a big impact if only he had a billion dollars and illiquid assets.

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Marlton firm accused of fraud

Welcome to the VC Roundup, where we’ll parse through venture capital news related to Philadelphia-based private equity firms and the companies they fund. Subscribe to the roundup as an email newsletter. If you have any VC-related news to pass along to us, please drop us a line.

Since it’s a light news week. Let’s call these all “Might be worth your time:”

NJBiz has a story about the recent success of Edison Ventures and what it means to New Jersey entrepreneurs.

Not exactly venture capital, but an investment firm in Marlton has been accused of cheating its investors out of $40 milion through a complicated Ponzi scheme.  The Inquirer reports that Carr Miller Capital spent investor’s money on on luxury cars, vacations, and a suite at the New Jersey Devils’ arena.

Comcast Interactive Capital portfolio company Ortiva Wireless has received $8 million Series C investment from Intel. The company helps wireless providers monitor video traffic.

Safeguard’s big take + Treventis moving to Philly for the capital

Welcome to the VC Roundup, where we’ll parse through venture capital news related to Philadelphia-based private equity firms and the companies they fund. Subscribe to the roundup as an email newsletter. If you have any VC-related news to pass along to us, please drop us a line.

DEFINITE READS

Remember when Safeguard Scientifics sold Clarient Technologies? It turns out that the company netted $144 million from the deal. According to the press release the deal gave Safeguard a debt-to-equity ratio of three-to-one. Safeguard also announced that it received a 3X return on its sale of Avid Pharmaceuticals.

Next time you hear someone complain about lack of capital in the Philadelphia region, tell them about Treventis Corp, a Canadian biotech company that established offices in Philadelphia “where it is hoping to have greater access to American venture capital.” The credit here, of course, goes to Cliff Lee.

MIGHT BE WORTH YOUR TIME

Who says the IPO is dead? Edison Ventures’ GAIN Capital has recently begun trading on the New York Stock Exchange. According to the press release, Edison still owns 13 percent of the company and the firm realized an 18X return on securities sold.

Edison Ventures <3′s New England + 5 other stories

Welcome to the VC Roundup, where we’ll parse through venture capital news related to Philadelphia-based private equity firms and the companies they fund. Subscribe to the roundup as an email newsletter. If you have any VC-related news to pass along to us, please drop us a line.

DEFINITE READS

Edison Ventures continues its push in New England with a $5.5 million investment in NetProspex a company based in Waltham, Mass. that helps businesses track sales and marketing clients. Mass High Tech has more about the firm’s sudden infatuation with New England.

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Does the VC industry need document standards?: Guest Post

This is a guest post by Christopher McDemus of MCD Law Partners a law firm specializing in startups and technology businesses, as part of our Guest Contributor Week. Want to have an op-ed or feature you’ve written to appear on TP, now or in the future? Drop us a line.

Disclosure: MCD Law Partners was a sponsor of our last Switch tech demo event.

The topic of standardized angel or venture financing documents is is an old topic, for sure.  Most recently, Brad Feld weighed in on this issue back in March 2010 by valiantly offering to take on the task of drafting standardized financing documents, but following a post by his partner Jason Mendelson (along with probably millions of emails from the disparate groups wanting to help), Brad decided to set aside the idea.

I am not sure how much another opinion adds to this discussion, but it’s a topic I still view worthy of debate as I think it will re-surface again and again in the future.

People in the start-up community have long called for a set of standard financing documents – a set of financing documents whose structure and substance were widely viewed as acceptable to both the entrepreneur as well as the financier (e.g., angel, super-angel, early stage venture fund) and that fulfilled each side’s legal/business needs.  Why standardize financing documents versus any other corporate set of documents?

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VC Roundup: First Round raises $126 mil, Philly VC investment is up

Welcome to the VC Roundup, where we’ll parse through venture capital news related to Philadelphia-based private equity firms and the companies they fund. Subscribe to the roundup as an email newsletter. If you have any VC-related news to pass along to us, please drop us a line.

Edit: Corrected the amount of Seatgeek’s round.

DEFINITE READS

While Q3 VC investment was down nationally, it was all rosey here in Philadelphia. According to the PricewaterhouseCoopers Money Tree report, there were 31 deals totaling $136.3 million involving companies in the area.

It looks like First Round Capital is finished raising its third fund. Astute SEC watchers have noticed that First Round Capital III is estimated to be somewhere around $126 million. The firm has had several nine-figure exits, and has backed nearly 100 startups, according to PE Hub. The firm celebrated the new fund the only way it knows how: by investing in FREEjit and UberCab.

MIGHT BE WORTH YOUR TIME

DreamIt grads SeatGeek have raised a round of $550,000 from a handful of out-of-town VCs. If you remember, the founders of SeatGeek started out as Scribnia before selling the site midway through their time at DreamIt. We interviewed the then-Scribnia founders last year. The company, now based in the 67th Ward, is a ticket search engine and price forecaster that helps its users find the cheapest tickets.

Comcast Interactive Capital is among the investors in CarWoo, a Lending Tree-like service for automobile purchases. The San Francisco-based company raised a $4.5 million round and is a Y Combinator grad.

GIVE A GLANCE

Burrill & Company, a San Francisco-based life sciences company that dabbles in VC, is opening up a new “Alternative Equities Group” here in Philly. It appears we’ve finally reversed the flow of money from Philly to San Francisco. Good job, everyone.

Nutter, Street to Young Involved Philadelphia: cheerlead, be more aggressive

Young Involved Philadelphia Chair Claire Robertson-Kraft introducing Mayor Nutter at the State of Young Philly showcase event on Fri. Oct. 1, 2010 held at WHYY. Photo by Sean Blanda.

Philadelphia’s young and involved cohort need to take greater hold of the future of the city for it to outperform even the region’s highest expectations, according to a slew of speakers hosted Friday by Young Involved Philadelphia.

The role of the region’s investment community in that future was also called into question during the night.

The social and speaking event was the showcase event of the State of Young Philly series, a first-time, tw0-week crush of conversations, workshops and discussions that brought together the 20-and-30-something sect of Philadelphians, who make up the membership of 10-year-old YIP.

In addition to other events, the week featured a Technically Philly co-sponsored panel discussion on the city’s business future.

Held at WHYY’s new Dorrance H. Hamilton Public Media Commons in Old City, Friday’s showcase featured a cocktail reception followed by a dozen speakers, half of whom were “more seasoned,” according to YIP Chair Claire Robertson-Kraft, and half were themselves young and involved.

Though there were expectations to the contrary, no fireworks shot off between Mayor Nutter and former Mayor John Street, who has recently taken to criticizing his successor on a number of issues. While both spoke at the event, the two men weren’t so much as in the same room at the same time, as their speaking was separated by state Treasurer Rob McCord. Councilman Bill Green was in attendance, welcomed by both Nutter and Street.

All had words for the city’s creative economies, which rely heavily on the young and involved, as did Philly Startup Leaders co-patriarch Blake Jennelle, who spoke during the less-seasoned half of the program.

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