Last night 100 Boston startupers and MBAs from the #1 ranked school for entrepreneurship, Babson College, braved the heavy wind and rain to head on over to the MassChallenge space. The event, “Angel Groups: Nuts and Bolts” was organized as part of our CampusConnect program with Babson’s Venture Capital and Private Equity Club.

The event boasted six panelists from top Angel groups in the greater Boston area including Michael Mark of Walnut Ventures, Chris Sheehan of Common Angels, Hambleton Lord of Launchpad Ventures, Ben Litauer of Boston Harbor Angels, and Jean Hammond of Golden Seeds. It was moderated by Yumin Choi of HLM Venture Partners, who sits on The Capital Network’s board and is a Babson grad himself.

These Angels left a great impression on the audience — the big buzz in the room after the panel was about how incredibly open and approachable these Angels were to speaking with entrepreneurs. In fact, after the panel opened up to questions from the audience, the Angels told many to come speak with them after the event concluded.

Before the event panelists were asked to answer basic questions about their Angel groups and processes like what type of investments they normally make, their type of term sheets, how often their group meets, the process an entrepreneur goes through with their group, common faux pas entrepreneurs make when approaching them, the group’s history and more. This gem of a spreadsheet of answers can be found here — make sure to bookmark all the great information these Angels were willing to share.

After each panelists described their Angel group, the first question by Choi prompted panelists about “When should you start thinking about approaching an Angel group?” Lord of Launchpad Ventures set the foundation, saying ideally you should have built a prototype and have a beta customer so they can determine how big of a need there is for your product or service. On the team side of the equation, he said his firm in particular is looking for a technologist and someone who knows how to sell. And on the funding amount side of the equation, he said you should be looking to raise anywhere from $250k to $2M from an Angel group.

Hammond of Golden Seeds, which invests in women entrepreneurs exclusively, went on to add that you should be able to demonstrate a product with a real need, a business model that will generate reasonable profits, and a plan for how to get to those profits. More important, Hammond is keenly interested in seeing an entrepreneurs market entry process and how they plan to acquire their initial customers.

Sheehan of Common Angels suggested that one of the best ways to get your foot in the door with an Angel is by not asking for money at all; instead approach them from a mentorship perspective — “I’m not here to pitch you, I’m here to get some advice.” He went on to emphasize the importance of introductions, remarking that 600-700 startups come across his desk a year, and those passed along from a colleague or friend in the industry make a big difference.

After Litauer of Boston Harbor Angels described the normal pitching process, he pinpointed the importance of “having a champion” in the Angel group you’re approaching. He offered, “We are a club and you have to convince a group of us. It can take a long time sometimes – up to 6 months – if you get funding at all … If you don’t find a champion, you’re unlikely to get funding. And that’s also why you should go to multiple groups.

Panelists discussed in depth pre money valuations and the type of exits they’re looking to invest in. On exits, Mark from Walnut Ventures made an analogy to baseball, offering that in the technology space in particular for his Angel group, triples are lucrative and sought after as much as home runs. He went on to offer to the entrepreneurs in the rooms that seeking Angel investment means you have a lot more flexibility in various exits as compared with the VC world.

Other Angel group questions the panelists demystified included how ready your story needs to be, how to approach feedback after a pitch, pre money valuations, how active Angels typically are with the companies they invest in, the value of sweat equity and having “skin in the game.” Here are several tweets from audience members touting their takeaways from the panelists:

• “milestone slide should be one of the key slides in your presentation” — helps angels attach money to a timeline.
• The fact that you are willing to invest in yourself is not as valuable as convincing a third party to invest in you.

• “Skin in the game” IS valued in entrepreneurs, but measured more in terms of the product you created than money u invested.
• Convertible notes, exits, skin-in-game, sweat equity, floors & ceilings = all buzz words today.
• skin in the game- angels value sweat equity. The under 50k Internet deal is hard to raise. The skin in the game is your work.
• “Exits aren’t as high as we would like today”
• jean Hammond – in Boston let’s not just focus on small exits – think big!
• “lot of interest in the angel community today for early exits”
• the angel group who led the round will usually take form as a spot on the board- they need to give you some time, strategy.
• “How active the board member is depends on two factors: the individual and the CEO … you should demand their time and energy”
• being a solo entrepreneur is not the way. Even if you have advisors you need to have someone join you
• focus in on the structure of the company over time. What will this company look like one financing and 2 financing from now?
• do you have people who have proved w funding they will quit their day job. Have your team in the cloud out there.
• “it helps if your advisers are investors”
• “what drives up a valuation is the team”

A big thank you to Babson MBA’s for plugging themselves into the Boston startup scene, MassChallenge for hosting such a big group, and Antler Agency for sponsoring the event with Magners!