Innovation in Baltimore
February 23, 2009
Tomorrow February 24, 2009 marks the inaugural meeting of the Baltimore Angels investment group at the Emerging Technology Center (in which I am participating). The Baltimore Angels puts angel investors in touch with entrepreneurs via bimonthly meetings and other events. It is exciting to see the energy around this new group that is hoping to provide alot of advice and some cash to local entrepreneurs as they strive to bring new and innovative products and services to market. This group is the brain child of Dave Troy and several other early pioneers who are all interested in stoking the fires of innovation in the Baltimore area. The other interesting element of the Baltimore Angels movement is that it started and grew via Twitter (@baltimoreangels). In fact the website (baltimoreangels.org) simply takes you the Twitter page.
Over 50 executive summaries were submitted to the Baltimore Angels for the first meeting where 3 companies were selected to present. I reviewed many of the executive summaries myself, and there were several very interesting ideas in the mix. And there were more than a few that don’t really have a chance. I think the biggest challenge I see is that there are alot of smart people trying to create “lifestyle” businesses. These are businesses that are interesting, fulfilling, and potentially very profitable, that will provide the founding entrepreneurs with a very good living and a great lifestyle. The challenge is devising an investment model that makes sense for the lifestyle business. Both entreprenuerus and investors need to profit from a lifestyle business, or the movement won’t continue to grow in my view. There is also alot of opportunity to help entreprenurs think about their markets in greater detail: going beyond – there a 14,000 customers in this market and we expect to get 5% of them in the next 3 years. After all intelligence and passion are essential, but every business still needs to solve a pervasive and urgent market problem in order to succeed.
But Baltimore is off to a great start in 2009. This is an important movement that will pay deep dividends in the future if it grows and prospers. Find a way to get involved and track the progress at twitter.com/baltimoreangels.
Comments
5 Responses to “Innovation in Baltimore”
Got something to say?
In my experience, lifestyle businesses and venture-backed businesses rarely are the same businesses. VC’s are not terribly interested in the lifestyle or comfort of the founders. VC’s want to invest in businesses that can grow quickly and can be sold at a large profit in a relatively short timeframe. The decisions that founders make when setting up a lifestyle business are not necessarily aligned, therefore, with VC interests.
That said, I’d LOVE to see a way to make this actually work…
Thanks for the comment Scott. I agree 100%. It seems there is a need for some kind of investment model that works for the growing number of lifestyle businesses, beyond the traditional bank. Don’t know what that is yet.
I was about to say, credit cards/loans are the model that fuel lifestyle businesses. Not sure anything else is really needed for those, we definitely need angel investors to be taking the big risks on the big ideas!
I agree Paul. I wonder whether there is a strong trend toward lifestyle businesses however. It seems I talk to alot of entrepreneurs who are interested in the work to live approach rather than the live to work model, that Scott correctly highlights, is the model demanded by the VCs. I know there is concern in the Valley as well that there are not enough big ideas anymore. In fact many VCs are going overseas to find new fertile ground for investments. But if we assume that angels and VCs should be only funding the big ideas, what does that mean if the trend toward lifestyle businesses is real? Interesting thought experiment.
Bob, I read the articles about VCs going overseas as well. If US entrepreneurs are leaning towards lifestyle businesses because of the current economic conditions or their limited vision, then that is their own loss. Lifestyle businesses will never be world-changing, and they were never meant to be. I think the best investors will be smart enough to hold off for the best ROI, and that everyone will be the better for it. It’s the Googles that make the world go round.