James Newell, a managing director at Seattle-based firm Voyager Capital, spoke at a lunch event hosted by Silicon Valley Bank and emphasized the need for more angel investors in the Seattle startup ecosystem. He pointed out that Seattle lacks angel investors despite having many wealthy tech executives who made their fortunes at companies like Microsoft and Amazon. Newell stressed the importance of having more individuals who are willing to take risks on early-stage startups with minimal conviction.
Newell, who spent over a decade as an investor in the Bay Area before returning to the Pacific Northwest in 2016, highlighted the need for angel investors with significant liquidity who are willing to invest based on their gut feeling about the founder. He mentioned that this type of approach to investing is more common in Silicon Valley but hasn’t gained traction in Seattle. Newell also noted that the culture and mindset of individuals who made their wealth at large corporations can contribute to the lack of angel investors in the region.
The role of angel investors in funding startups is crucial, as they provide the initial capital that allows early-stage companies to get off the ground. Organizations like the Seattle Angel Conference and Alliance of Angels are working to promote angel investing and educate potential investors in the Pacific Northwest. Despite these efforts, Washington state lags behind other regions in terms of pre-seed deals, with only 2.7% of such deals over the past year compared to 38% for California.
Newell emphasized the importance of creating a more supportive environment for angel investors in Seattle, where individuals are more willing to take risks on early-stage startups. He suggested that fostering a community of angel investors who are willing to invest based on personal connections rather than detailed financial analysis could help attract more capital to the region’s startup ecosystem. Encouraging successful entrepreneurs to give back to the community by investing in new startups could also help boost angel activity in Seattle.
The lack of angel investors in Seattle is seen as a barrier to the growth and success of the city’s startup ecosystem. Newell’s call for more low-conviction check writers who are willing to invest based on intuition rather than extensive due diligence reflects a desire to foster a more innovative and risk-taking culture in the region. By encouraging more individuals with liquidity to become angel investors and supporting initiatives that educate new investors, Seattle could see a rise in early-stage funding for startups and a boost in entrepreneurial activity.
Overall, Newell’s remarks at the Silicon Valley Bank event underscore the need for greater angel investor participation in the Seattle startup ecosystem. By creating a more welcoming environment for first-time investors and promoting early-stage funding opportunities, the region could attract more capital and support for its growing community of startups. Increasing angel activity in Seattle is vital for the continued growth and success of the city’s innovation economy, and efforts to expand the pool of angel investors will be crucial in achieving this goal.
