Last week, Venture Hype interviewed Paul G. Silva, managing partner of Angel Catalyst, to dig deeper into angel group management and the numerous tasks involved. Informally-managed angel groups may want to consider hiring a manager to take the grunt work out of angel investing and focus on the meat of the angel investing game. That is, invest in quality deals that have the potential to blossom like a wild flower.
But if you’re meticulous and are up for the challenge, you may consider managing angel groups as a career. Today, Silva recounts how he got into angel group management and suggests the best way to get involved.
* Edited Interview
VH: What drove you to become an angel group manager and founded Angel Capitalist? What’s your story?
PS: Short version: I was a physicist. Graduated college and co-founded All inPlay, an online game company focusing on the blind and visually impaired. We ran out of money and went into a bootstrap, no-salary mode. My former mentor had just founded an angel group and needed help. He made me his partner in the angel group after a year.
A year later, my mentor raised a few millions and launched a new business.
Another year later, I realized that managing multiple angel groups could be a fascinating and rewarding career and launched Angel Catalyst.
Yet another year later, I consulted with a group of angels and helped them design what would become the Boynton Angels of Worcester MA.
VH: Say an angel group is interested in hiring a professional manager; how are angel group managers compensated? For example, what’s the structure? By monthly salary derived from membership dues, a percentage fee upon successful exits, or others?
PS: There are a variety of angel groups and compensation structures. The group I currently manage has no affiliated fund; therefore, it pays a flat management fee to Angel Catalyst. Groups that have affiliated funds usually compensate their group managers VC-style, 2/20 from the fund (2% management fee/20% carry).
VH: What advice would you give to those who’d like to become a professional angel group manager?
PS: Intern at a professionally-managed angel group. Ironically, most of them have small budgets with overworked staff. An intern can make a big difference. And if there’s no affiliated fund with the group, most managers will eventually move on to greener pastures. This opens a path for past interns as they may be promoted to paid assistants.
VH: Angel hair or spaghetti?
PS: Angel hair!
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* For series, references are published in the last installment of the series.
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