WebInno20 happened yesterday, and it was by far the largest Web Innovators Group meeting. It felt like there was close to double the amount of people from last time. My estimates put it somewhere around 700, though I could be wildly wrong.

Some changes were in effect this time. The side dishes were moved to another room. This really opened up the crowd and allowed for more chairs in the main presentation room. Also, there was a separate breakout session in the main room titled “Raising Angel Financing 101″ (notes on that to follow).

Before I go on, I have a suggestion for future WebInno attendees: write some keywords on your name tag that describe what you’re interested in. For instance, I wanted to talk to mobile app people, so I wrote “mobile apps?”. Not enough people do this, so it’s really hard to find the right people to talk to.

Raising Angel Financing 101

James Geshwiler, Managing Director of the Common Angels, hosted a session called “Raising Angel Financing 101.”

The presentation was mostly about the contrast between angel financing and VC financing.  In contrasting the two, James suggested that startups find the fit that is right for them. VC funds have grown over the last decade, and as funds grow, they invest larger amounts and need larger exits. While this sounds good, the reality is that many startups can’t justify high exits. Angels, on the other hand, invest in smaller amounts and require smaller exits. A $5 million acquisition in a couple years is a win-win when you are angel funded, but it’s a no-go when you’re already $10 million deep in VC funds. Ask yourself what makes sense and find investors that fit your strategy.

As a side note, James pointed out that he didn’t like the term “angel investor” and prefers “private investor.”

If you are looking for angel funding, one web site he suggested was Angel Capital Association.

Some other points from his slides:

• The recession and how it affects us:
  • Financial risk is up, but competitive risk is down.
  • Many angels now seek startups that can reach cash-flow break even with only one round of funding. They don’t want to depend on additional investors and a second round to keep your company afloat.
  • Exit in 5 to 7 years is realistic.
  • Having a low burn rate in this economy is one of the best things you can say in your pitch.
• Common Angels typically invests 1 to 3 million in exchange for 25-40% of a company.