There is a divide among the divine angels. Traditional early-stage investors -- other wise known as angels -- are usually passive: Their activity measured solely by the speed with which they sign a cheque. But the vacuum in the venture-capital space has resulted in a new breed of "active" angels -- the kind that roll up their sleeves and jump into the operational fray.
David Ceolin, former founder of Digital Cement, is the poster boy for this new breed of start-up seraph. Mr. Ceolin, who leveraged a book on entrepreneurship into a lucrative consulting firm that was sold to Pitney Bowes Inc. in 2007, is enjoying his new role as mentor to companies.
In 2009, he started to look for investment opportunities, believing that "this country needs experienced operators to get involved in the next generation of companies."
Even more than capital, Mr. Ceolin contends startups need connectivity: "We need angels that are going to actively connect entrepreneurs to opportunities."
Mr. Ceolin goes so far as to say "angels can do more with less than traditional venture capitalists." Although Canada is in the early days of formalizing an angel eco-system, momentum is building as the angels become more methodological in their approach. As a result, he says, "VCs have been rendered redundant in the early-seed stage."
Certainly, entrepreneurs such as Ali Asaria, founder of the online health and beauty retailer Well.ca,says angels are a better fit with the start-up culture.
Mr. Ceolin, who invested in two rounds of financing for Well.cathis year, has not only helped the company recruit talent for senior positions, but has also given training sessions to employees to teach them retention marketing. With 45 staff and having raised $3.4-million this year, the company is now making enough profit to sustain itself -- due in part to the support of a network of 18 angels.
"It's been terrific working with David; he brings a ton of value, time and experience," says Mr. Asaria, adding he had heard of angels in Silicon Valley who worked as connectors and accelerators for the companies in which they have invested.
Now he is experiencing it himself with Mr. Ceolin. Sometimes it's hard to understand what's in it for them ... but the amount of time they put into your company, you feel honoured," he adds.
Of course, when it comes to the angel community, one size does not fit all.
"Working with angels is about working with individual personalities. You interview them; they interview you."
And sometimes relationships blossom beyond the boardroom.
"He's my mentor, broker, chairman, my friend," says Jeff Anders, chief executive and co-founder of The Mark, an online blog that features commentary by experts and academics.
Mr. Anders says he briefly considered turning to venture capitalists, but The Mark wasn't a business entity where one produces a number of widgets or a service or has billable hours -- all concepts that help an investor determine valuation.
What Mr. Ceolin brought to the table was his understanding of "the whole ecosystem around an idea," says Mr. Anders. "He's always thinking about scalability and sustainability," he adds.
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