Investment club vs. Angel Groups

Robert J. Bradbury (
Thu, 12 Aug 1999 17:26:34 -0700 (PDT)

> Brian Atkins <> wrote:

> I was not at Extro4, so perhaps you got some tips on companies
> in need of funding.
Only from the perspective of the Geron & Kronos presentations. Geron is currently public, Kronos is not.

> That is the big problem with forming an angel group- finding the
> companies.

I wasn't thinking of an Extropian Angel Group per se. I doubt that collectively as a group we have the resources for this type of thing. (To do this properly you have to have a capital pool of millions of dollars.) I was thinking more along the lines of an Investment Advisory group (club) to review and recomend Extropian investments. Examples of this would be Geron and Alteon which are at very different stages of development but since they are working on pro-longevity biotech, they would be the type of investments we might want to pursue.

My main rationale for this is to see if it is possible to create a counter-trend to the market emphasis on short-term ROI. The volatility in the markets favors the big players and not the small investors. The ra-ra Internet stock enthusiasm creates a bad climate for biotech startups that have much longer development cycles. If one always goes for the short-term, high-ROI investments, that means the slow-to-develop plays (nanotech, anti-aging research, etc.) will always get left out. So one either has to rely on government funding (which many people in this group intensely dislike) or wait a long time until the foundation technologies develop to the point where the idea development is done by many people simultaneously (presumably lowering the profit margins and ROIs).

While I would not argue that one should put all of ones investment portfolio into ExI/Foresight compatible investments, it could be that a collection of individuals with a long term focus, could invest some percentage (10-20%?) of their investment dollars into these types of investments with the assumption of really long term payoffs as well as providing some economic stability for corporate "management". I know that I (as say the president of a biotech company), would be much more comfortable pursuing a long term strategy if I knew that some fraction of my shares were being held by investors that were not going to read every quarterly report with the intent to sell at the first hint of bad news or difficulties.

> By the time you see a real press release from a company,
> they are probably past the angel stage and into the big VC money
> (past where we might want to invest).

I would disagree. If you are looking for a big short-term "payoff" then you want to play the Angel game. But the big payoff has associated risks. I'm looking more for the approach that if you believe a company has a fundamentally sound long-term strategy but one that will not sell well given current mindsets or short-term ROI focus, then you want to invest for the long term. Essentially, these would be the type of investments you would want to fill your portfolio with if you had to undergo Cryonic suspension. The "buy em & forget about em" investments.

> You have to be able to meet the management team and really
> question them before you will have enough confidence to invest.

While this is always true, it is less of a problem if the company is already "public". For example, if Zyvex ever went public, I would certainly be one to accumulate that stock on any market "softness". I know the management, I believe in and want to support the work and if they are successful, I think I would make a lot of money. What we need is a "short list" of 10-20 companies like that that we "know" will ultimately be successful if they survive long enough. You need a number of companies to distribute the risk.