This is an interesting portrait of Angels.  More and more start-ups are looking to ‘angels’ for seed (and beyond) financing, even though they know that angels can complicate future rounds of financing.  Buried within all of these statistics one that caught my eye is only 6000 companies sold for $10m or more.  Also, we can assume that the ‘80-20’ rule applies to angel investing meaning that you need to work very hard to raise a little money.  Based on recent experiences in CEO Roundtable it seems that high net worth individuals are currently a preferred source of financing, especially in biotech.  VC investing is returning to some sectors – those that are currently in fashion like high tech (a new bubble?) and healthcare.

I was inspired this week by Scott Kirsner’s article – Mass. IPOs don’t create many angel investors. I thought it would be interesting to pull a few facts and estimates together for our entrepreneurial community. I think these numbers bust a few myths and may surprise some prospective investors.
1.  There were 318,000 active angel investors in the US last year up some 20%. (Center for Venture Research)
2.  They invested $22.5Bn up 12.1%. (Center for Venture Research)
3.  This implies an average angel investment of $70,755.  (Center for Venture Research) (larger than I would have guessed)
4.  The $22.5Bn was invested across 66,230 companies, an increase of 7.3%, implying an average deal value of $339,725, 4% increase.  (Center for Venture Research) (larger than I would have guessed)
5.  The sectors attracting that money were in order: Software 23%, Healthcare 19%, Industrial/Energy 13%, Biotech 13%, IT Services 7%, Media 5%. (that’s 80% of it) (Center for Venture Research)
6.  Angel investments that exited in 2011 did so 54% of the time by selling out and 24% of the time by going bust. (Center for Venture Research)
7.  In addition to this analysis, the first ever HALO Report issued by CB Insights in conjunction with Silicon Valley Bank and the Angel Resource Institute attempts to dig deeper into Angel Groups not just individual angels. Their analysis provides even further insight to Angel GROUPS. Specifically  these groups invested $873m in 2011. (which implies to me 4% of the total market investment above of $22.5Bn)
8.  The $873m was invested in 573 deals at an average deal value of $1.5m and a median value of $700,000, up a whopping 40% increase over 2010.
These seem really high to me.
9.  Regionally the $873m was spent in order: California 21%, Great Lakes 15.5%, New England 14.6%, Southeast 12%, Southwest 8.9%, Mid Atlantic 8.9%, Northwest 7.2%, New York 6.6%, Great Plains 4.1%.
10.  Sectors wise Angel Groups spent their money 37.4% of the time on Internet and 23.5% on Healthcare, that’s 61% right there. Mobile picked up 10.4% and Energy 4.3%.
11.  The active Angel Groups were named by Halo as: Tech Coast Angels – Southern California, Golden Seeds CA, MA, NY, Band of Angels (great name) Menlo Park CA, Central Texas Angel Network, Austin, TX and Launchpad in Boston, MA

Conclusions

1. I’m quite surprised there as many as 318,000 active angel investors given how few businesses sell out every year for $10m or above (6000) thus creating US angel investors.
2. I suspect there is a Powers Law curve at play and that a tiny % of big hitters of the 318,000 are skewing the average towards $70k.
3. We need to conduct more research to understand the make up of 318,000 active investors compared with only 573 deals tracked by the Halo Report of active Angel Groups.
4. I worry that at both the macro $22.5Bn level and the smaller sample of Angel Group level there remains a dominant software & healthcare mentality at the expense of Energy, Media and IT services. It almost implies that software and healthcare are less risky than other sectors or perhaps the management teams just tell a better story!

by Ian Smith

via Ian Smith: Small business owners always hear plenty of economic data every week. Recently the news reports have been generally positive. Increased retail sales, Decreasing unemployment,  A higher stock market all seem to be good signs.

That being said, what else should a business owner in the US take into consideration in this day and age?

As the owner of a private business you must wonder from time to time what your business is really worth. I’ve blogged before about the valuation of private companies. In the end it comes down to beauty is in the eye of the beholder as Facebook proved buying the pre-revenue Instagram photo sharing app for a cool $1Bn.

Don’t even try to divide that number by 40 million users and justify a price to me!
One thing is certainly true, grabbing attention and specifically users is the start of a business model but I don’t believe you can call it a business model until you charge money for the service. Building a business for a specific buyer is a long odds game. However building a business with an eye on what buyers admire and cherish is a very good idea. It forces the owner of a business to work on the right stuff. A summary of the stuff that buyers cherish was covered in Staging Your Business For Sale (even if you don’t sell it).

click here to read full article

Decision Resources Inc., founded by CEO Roundtable member Sarah Fuller, has announced that it just acquired Pinsonault of Mt. Olive, N.J.

Decision Resources Group, a parent to several companies that offer services to the biotech and pharmaceutical sectors.
The acquisition of Pinsonault by Burlington, Mass. based Decision Resources will result in a significant expansion of Decision Resources’ Market Access Business unit, which includes Fingertip Formulary, HealthLeaders-InterStudy and PharmaStrat.

Pinsonault currently has three business lines: data and analytic tools to support managed markets marketing and sales staff,; online training programs for biopharma companies,; and events and research.

“The opportunity our employees and our brand now have as part of the Decision Resources Group family is tremendous,” Tony Pinsonault, managing partner at Pinsonault, said in a written statement. “Our 16 years in the business have taught us to wisely choose who to partner with, and we are thrilled that Decision Resources Group has the confidence in us to bring us into their fold.”

Market Access Business President Jim Lang will lead the integration of the Pinsonault brand, the company announced Tuesday. Lang, who joined the company in January 2012, was president of IHS Cambridge Energy Research Associates, a provider of energy subscription information products, advisory services and events. The Pinsonault office will remain in Mt. Olive.

Sarah Fuller is a long time member of CEO Roundtable and one of our heroes. She led DRI out of Arthur D. Little Inc. as an ESOP spinout and then built the company, taking it through two private equity buyouts and building a portfolio of companies to serve the global pharmaceutical industry with the best market information.

You can learn more about Decision Resources and its subsidiaries at www.decisionresources.com

Mark Leuchtenberger, president and CEO of Rib-X Pharmaceuticals, anounced that the company has appointed former U.S. Food and Drug Administration deputy director and infectious disease expert  Dr. Matthew A. Wikler as chief development officer, effective April 30.

He will take a strategic role in the future clinical development of the company’s product candidates, including implementing the Phase 3 program for delafloxacin, which successfully completed a Phase 2b clinical trial in acute bacterial skin and skin structure infections in December 2011.

“With numerous drug approvals and successful product launches under his belt and extensive experience in antibiotic drug development at both small and large companies, Wikler is an excellent complement to an already exceptional team here at Rib-X,” Leuchtenberger said in a written statement. “We look forward to working with him as we advance delafloxacin into Phase 3 and further the development of other product  candidates and programs in our pipeline.”

Wikler has more than 30 years of drug development experience, primarily in infectious diseases. According to Rib-X, he has played a major role in the clinical development and subsequent approval of 19 antimicrobial drugs and vaccines. Before joining Rib-X, Wikler was president and CEO of IASO Pharma Inc. of San Diego, Calif., a clinical- stage biotechnology company focused on developing antibacterial and antifungal therapeutics. He also held senior- level positions at the Institute for One World Health, Mpex Pharmaceuticals and Smith Kline & French/Smith Kline Beecham among other companies.

He spent two years at the FDA, serving as deputy director of the, Division of Anti-Infective Drug Products for a portion of that time. He currently serves on the board of directors for the Clinical and Laboratory Standards Institute and previously served as the chairman of the Antimicrobial Susceptibility Testing Subcommittee.

Rib-X has two antibiotic candidates in clinical development:, the enhanced- spectrum IV/oral antibiotic delafloxacin and the next-generation IV/oral oxazolidinone radezolid, which is designed to be a potent antibiotic for long-term treatment of resistant infections.

Last November, the company filed a registration statement to go public, but did not specify the number of shares. In February, the company scored a $3 million milestone payment from French biotech giant Sanofi related to a license for Rib-X’s antibiotics to fight superbugs. The two companies formed their partnership in July 2011. As of February, Rib-X had taken in $22 million through four milestone payments, and it could receive as much as $740 million from the deal.

Leuchtenberger is a long time member of CEO Roundtable. He is building a very strong company, poised to capitalize on its success in drug discovery and development … and to deliver new antibiotics to help millions of people worldwide.

The Worcester Telegram reports that Yael Schwartz, CEO of Hygeia Therapeutics, has worked out an arrangement to license some of Hygia’s compounds to Biopelle, a division of Ferndale, for further development as dermaceuticals compounds that are not drugs approved by the FDA but nonetheless provide measurable benefits to patients.

One of these compounds, (CL-214), has been shown to offset some of the negative skin damage that happens to women after menopause. According to results presented to the Dermatology Advisory Board (DAB) at a recent meeting in Maui, CL-214 restores the so-called keratinocyte skin layer (the outermost one) to the cell count it enjoyed prior to menopause, and it increases by 10 to 20 percent the thickness of so-called human skin explants.

The DAB was so impressed with these results that its dermatologists are offering their support for a robust set of skin assessments – the non-FDA equivalent of clinical trials – to demonstrate that CL-214 is not only effective in improving skin, but also does not produce any negative systemic side- effects because it acts on hormone receptors in the skin. In short, Canterbury and Biopelle will generate data from a robust set of trials to demonstrate that CL-214 works and does not cause negative side effects.

Skin care is by far the most important category in the global beauty and personal care industry. The world-wide market for so-called aesthetic products is huge.

You can read the full story here

Hygeia will continue to develop its core products for post-menopausal women and seek FDA approval. See www.hygeiatherapeutics.com, for information on Hygeia’s product pipeline.

Schwartz is a member of the CEO Roundtable. We congratulate her on finding a good way to continue funding Hygeia’s product development … and generating what could become a very significant revenue stream.

While scanning my inbox I came across a great email from Bates Communications. The email subject drew me in, “If Bubba Were a CEO…” , and I needed to find out what Bubba they were referring to. As soon as I clicked on the email I realized they were referring to Bubba Watson, the new member of the Green Jacket club. As I read through the article, I found myself compelled with the overall tone of the email – TAKE A SHOT. It’s absolute truth in this volatile economy – so please check out this article by Bates Communications on what Bubba Watson would do as a CEO – and the lessons we can learn.

via Bates Communications So last week I was watching TV, I think it was ESPN, and they’d hauled out an old 2010 interview with Bubba Watson, the improbable and irrepressible winner of this year’s utterly unpredictable Masters Tournament. Bubba is smiling, hitting shots off the staged practice area, and telling a story about how he once demo’d a new golf club by playing an entire round with only that club. He shot a 77. “I figured after that it was worth putting in my bag,” he joked. After all, for Bubba, golf is all about having fun.

The sound you heard post-Augusta was the groaning of golf pros everywhere who anticipated their lesson schedules would be a lot lighter. If Bubba Watson can play like that, NEVER HAVING TAKEN A GOLF LESSON IN HIS LIFE, then why shouldn’t the rest of us save a few bucks and just get out there, have fun and PLAY?

Nothing seems to faze the guy. That Sunday he was so deep in the woods he couldn’t see, and he went ahead and hit a gap wedge shot on the 10th hole that somehow hooked and landed on the green, setting up a simple par that helped him win the tournament. In pre-final round coverage, not a single TV sports anchor or pro-turned-announcer had uttered Bubba’s name in the same sentence with the word contender. It didn’t occur to anyone, including Bubba, that he could be bear-hugging his proud mom on the 18th moments after the major of majors. And the round of his life. “I never really had a dream that went this far,” he mused after the most misty-eyed green jacket ceremony in the history of the game…”So I can’t really say it is a dream come true.”

All this got me thinking. If Bubba were a CEO, what would he do? “I attack, I always attack,” he told reporters at the post tournament news conference. “I want to hit the incredible shot. Who doesn’t?” he asked. “That’s why we play the game of golf, to pull off the amazing shot.”

Think about it. If Bubba were a CEO, he would be taking shots! And those flying balls of courage would not only have a good chance of going in the hole, they would thrill a crowd of employees who cheer for a leader who actually, genuinely, truly just loves to GO for it.

The ‘splainin’ about Bubba’s success seems to get boiled down to a consensus that he is a “natural.” Personally I don’t believe in the concept of a natural…in golf or in business. What I do believe is that when you go to work every day remembering to find the fun and be YOU, you put yourself and everybody around you at ease and invite success to your game. When you are having fun and relying on your wits, you eventually fall naturally into your swing. If you worry about nothing but winning and that makes you lose sight of the purpose of it all, it feels, well, mechanical.

Taking nothing but safe shots? What fun is that? Eventually the stress of trying to do everything by the golf lesson textbook makes you an early candidate for heart disease. “I don’t play the sport for fame,” explains Bubba.”It’s just me. I’m Bubba. I just want to be me and play golf.”

I don’t mean to be cavalier here about the responsibility on your shoulders, whether for a team, a division, a business, a function or a company… but come on people, what in the heck are we doing, if we aren’t having fun? And being ourselves?

I am giving myself the same lecture I am giving you. At the beginning of the year when the president of our company and I sat down to review his goals I made him put “fun” on his list. Two months later when I was stressing out about something I can’t even remember, he came back and told me I needed to put fun on my list, too. Right he was.

The part about just getting out there and playing? I guess Bubba’s dad taught him the basic grip and swing when he was ten, and he took it from there. And so it is with successful leaders in general. They just get on with it. A lot of the ones I have known and admired over the years have these Bubba-esque qualities. If they hit a bad shot? So what? Get back in the game. Land in the trap? No worries. You’ll learn how to get yourself out of a bind. It will build your confidence. Don’t sweat it.

I don’t know about you but I am going to go to work today … and channel a little inner Bubba. Hubba Hubba!!

Effectiveness is the key to keeping a job. As a CEO, if your plan of action do not product results and increase sales, then you probably will not have your job for much longer. ChiefExecutive dives into the reasoning behind CEOs taking on more direct reports and increasing their effectiveness.

Via ChiefExecutive.net - The CEO’s span of control has roughly doubled over the past twenty years, from almost 5 to just under 10. Two immediate questions come to mind: Why? And is this making CEOs more—or less—effective? The short answers: First, it’s happening because expectations for CEOs have risen and, counter to many reports, so has their capacity. Second, the relationship between top team size and effectiveness depends, mostly on a CEO’s stage of tenure.

The long-term rise in CEOs’ span of control is the result of several factors. Rising expectations from board members and other governance changes over the past decade have put pressure on CEOs to get closer to the business, take on more positions directly, and not work through intermediaries. Indeed, in our annual study of succession trends among CEOs (published since 2000), we have seen newly appointed CEOs asked with increasing frequency to focus tightly on the business. More and more often, someone other than a new CEO is the chairman: In 2000 just over half of incoming CEOs in North America held both titles, a figure that fell to 10 percent in 2010. Separating the Chairman and the CEO positions often means that CEOs have more time for the business, as intended, though the CEO’s relationship with the chairman can become time-consuming in itself if it’s difficult. Nonetheless, and in parallel, fewer CEOs are naming COOs except when they’re setting up their own succession.
With all that going on, where are CEOs getting more time? The most significant enabler is technology. Basics like voicemail and e-mail have made communications simpler and more efficient. Video means less travel. And improvements in customized performance dashboards have helped CEOs understand their companies more deeply and faster. All this gives CEOs the ability to spend one-on-one time with more direct reports not on the basics, but on topics like tough people decisions or operational issues.

The second question is whether this is a good thing or not—are CEOs able to do more for their companies in this situation? Some CEOs are troubled. Many have an idea of how many direct reports they should have—often seven, for reasons I don’t understand. In my experience, seven is very frequently too few yet, in some cases, too many. There’s a better way to think about it.

Look at Sara Mathew, who became the chairman and CEO of Dun & Bradstreet in January 2010. She didn’t replace herself as COO, so on top of the six people who had reported to her predecessor, she tacked on the 10 who made up her previous team, giving herself 16 direct reports. She had a number of reasons, including wanting to stay on top of what was happening across the organization; she gave herself a direct view into aspects of the business that earlier CEOs were willing to delegate. Such an approach is very often the right one to take in a CEO’s first year to eighteen months. Other reasons to have a large team in this phase are to evaluate talent and to ensure exposure to a wide range of views while shaping a new direction. The best CEOs use this period to understand how to realign the members of the team relative to where the company is headed; ultimately, as they enter a “steady state” period of tenure, they reduce the number of their direct reports. Mathew, for example, gave up direct responsibility for roles and functions that were fairly mature or self-sustaining and elevated new strategic priorities, especially marketing and innovation. Today, she has seven direct reports, a number she describes as “comfortable.” We typically see CEO spans drop back to five or six as they prepare for succession. They do this by asking one, two, or three leaders to take on substantial P&L roles as part of the assessment process for choosing a new CEO. In addition to their tenure as CEO and whether they are also chairman, we advise CEOs considering the right size and composition of their team to think about the degree of cross-organization collaboration required and activities that take significant time beyond their direct span (such as interacting directly with customers or regulators).

In the end, while CEOs have the time to manage a larger top team, they should only do so when they know it’s bringing direct benefits to the business. The fact that average span has risen may have something to do with the fact that turnover among CEOs has risen, so more and more are early in their tenure, when large teams do indeed make them more effective. The best CEOs are attentive to the ever-evolving demands of the job and continually adjust their teams as they go.

March is Women’s History month, a chance for us to look back on all the advancements women have made. Celebrating women’s history began in 1978, as “Women’s History Week.” There was a largely positive response, and as word spread, more and more people started recognizing this week, even in school curriculums. It wasn’t until 1987 that the National Women’s History Project petitioned to Congress in order to have a whole month dedicated to Women’s History.

I want to introduce you to the Women of the Roundtable.  These members are the CEOs of their companies.  You have met many of them in our Members in the News emails.

Nancy Kolligian, Distributor Corp – New England, www.dcne.com

Barbara Dove, Dove Help Desk, www.dovehelpdesk.com

Anita Myer, Boston Neurofeedbak Center, www.bostonnfb.com

Jeanne Colachico, Jeanne M. Colachico, Esq. & Associates, www.jmcolachico.com

Sarah Fuller, Decision Resources Inc., www.dri.com

Mary Boone Wellington, Lightblocks, www.lightblocks.com

Laurie Halloran, Halloran Consulting Group, www.hallorancg.com

Nancy Briefs, InfoBionic

Judy Habib, KHJ Brand Activation, www.khj.com

Barbara Osband, Cambridge BioMedcial, www.cambridgebiomedical.com

Mercia Tapping, Boston Green Goods, www.bostongreengoods.com

Janet Wolfe, Wolfe Labs, www.wolfelabs.com

Bonnie Fendrock, Hepregen Corp., www.hepregen.com

Leslie Williams, ImmunsanT Inc., www.immunsant.com

Yael Schwatrz, Hyheia Therapeutics, www.hygeiatherapeutics.com

Barbara Fox, Avaxia Biologics, www.avaxiabiologics.com

Laura Hales, Extend Biosciences, www.extendbio.com

Women have made huge advancements specifically in the business world. Revenue for women-owned businesses in 2002 was $939 billion, up 15% from 1997. That number has grown even more to $1.9 trillion being generated by the 10.1 million women-owned firms today.

Women are making their presence known in the workforce, not just as employees but leaders as well. Women business owners employ 13 million people and account for 40% of all privately held firms. There are also 1.9 million firms that are majority-owned by women of color in the U.S. These firms grew faster than all privately held firms between 2002 and 2008.

Barbara Fox, CEO of Avaxia Biologics, announced that her company just received an additional SBIR grant of $1.5 million from NIH to continue its work in inflammatory bowel disease.

The Lexington-based, privately held biotech company, which develops orally active antibody therapeutics for the treatment of gastrointestinal diseases, was awarded a Phase II Small Business Innovation Research (SBIR) grant from the National Institute of Diabetes and Digestive and Kidney Diseases to support the development of a novel antibody therapeutic for inflammatory bowel disease (IBD). This award was based on the successful completion of a Phase I SBIR award, that demonstrated the efficacy of AVX-470 in mouse model systems.

“We believe these consistent and statistically significant results in the standard animal models of IBD indicate that AVX-470 has the potential to become a leading therapy for inflammatory bowel disease, a chronic and debilitating disease of over a million and a half North Americans and four million people worldwide,” Barbara S. Fox, Avaxia’s founder and CEO, said in a written statement. Fox, who was just named one of Mass High Tech’s 2012 Women to Watch, said that the company plans to enter into clinical trials with AVX-470 in patients with IBD this year.

Earlier this year, the company raised a $3.44 million Series A round, out of a $4.46 million equity offering initiated late last year, according to an amended Form D filing with the U.S. Securities and Exchange Commission on Jan. 6.

Barbara is a member of CEO Roundtable. We congratulate her and her team on reaching this milestone.

Bob Linke, CEO, Embera Neuro Therapeutics, announced that pretrial clinical results of his company’s smoking cessation and cocaine dependence drug , (EMB-001), has been published by two peer reviewed journals, Psychopharmacology and the Journal of Psychopharmacology.

“We are very pleased these two peer-reviewed journals accepted our studies for publication,” Linke said. “The data continue to suggest the potential efficacy of EMB-001 in treating stress-related addiction disorders, such as nicotine and cocaine dependence, and further study in our Phase 1 clinical trial is planned for 2013.” You can read the full press release at www.emberaneuro.com .

Bob is a long time member of CEO Roundtable, and we know how long and hard the road has been to reach this milestone. The story of the development and testing of EMB-001 is fascinating. I am always so impressed by the dedication, passion, patience and resiliency these members bring to finding real solutions to very important health problems. Congratulations to Bob and his team.

To learn more about other members of the CEO Roundtable click here.