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Hyde Park Angels doubles deal total, ramps up content platform

December 7, 2016 By Alida Miranda-Wolff

Hyde Park Angels is one of Chicago’s best-known investment groups, but recent changes to its strategy have it making more deals than ever as it enters its 10th year.

It’s gone from a group where inexperienced investors went to try out angel investing to one where seasoned investors turn for good deals, said Maura O’Hara ⇒, executive director of the Illinois Venture Capital Association.

The group, which grew out of the University of Chicago‘s Booth School of Business in 2007, was always well-regarded, O’Hara said. But in recent years it has invested more in content and events, in organizing its roster of investors — many of whom are entrepreneurs or executives — into subject matter categories, and in recruiting investors with deeper pockets.

Those changes are attracting portfolio companies despite an increasingly competitive early stage funding market in Chicago, O’Hara said.

“If you’ve got a great business and you’re looking for a VC, you want the money but you also want the Rolodex that comes with the money,” she said, noting that many leading venture capital firms offer advisers and connections. “Now all of a sudden you’ve got Hyde Park Angels … where they’ve got 100 people with 100 Rolodexes.”

Hyde Park Angels has invested $8.2 million in 29 deals this year, up from $4.1 million in 20 deals in 2015, said Alida Miranda-Wolff, who runs the group’s strategy and communications. She said a new focus on branding and bringing more entrepreneurs into its investor network has improved the group’s deal flow.

But Hyde Park Angels wasn’t always so good at using its investor network — which currently includes 49 founders and 83 CEOs — to market itself, she said.

In March 2015, eight months after Peter Wilkins ⇒ took over as managing director, Hyde Park Angels partnered with researchers at Northwestern University to assess its reputation. The group learned that outsiders thought it couldn’t make quick decisions, or that it was stuffy, or that it valued investors over entrepreneurs.

Miranda-Wolff, 23, wanted to change that. She joined the firm in late 2014 after graduating from the University of Chicago, where she studied English and law, with a rough job description of focusing on membership. That’s evolved into managing what she calls a platform of online and offline content and tools to connect Hyde Park Angels’ members and investors, all designed to support portfolio companies.

She announced her promotion to director of platform, the group’s first such position, on Wednesday.

The platform approach — which encompasses producing blog posts such as “Building the Perfect Pitch,” panels on topics including “How to Raise Venture Capital” and online tools to connect portfolio companies and angels — has raised Hyde Park Angels’ profile, Miranda-Wolff said.

That content has strengthened Hyde Park Angels’ brand, Miranda-Wolff said. People confuse it with another Chicago-based venture firm, Hyde Park Venture Partners, less frequently now. But operational changes have also improved Hyde Park Angels’ reputation.

Miranda-Wolff said some entrepreneurs used to think it took six months to get an answer from Hyde Park Angels. That wasn’t true; the group simply didn’t prioritize passing on deals quickly. She said they have changed that practice and now do a better job publicizing their ability to make investments within as little as 24 hours, if the deal makes sense.

“The deals we’re in now are better, easier,” Miranda-Wolff said. “It’s not that this is the first time we’re doing great deals. It’s that we have a wider and more expansive deal flow.”

Hyde Park Angels’ latest investment was also announced Wednesday: It participated in a $15 million Series B round for Chicago-founded Kenna Security. Some of its other investments were in Chicago-based appointment calendar maker Occasion and shipping logistics software maker FourKites, and Prism Analytical Technologies, of Mount Pleasant, Mich.

Karin O’Connor ⇒, Wilkins’ predecessor at Hyde Park Angels, said the group had good deal flow under her tenure due to its connections to the Polsky Center, which gave it access to the University of Chicago’s student and alumni companies. Techstars Chicago, then Excelerate Labs, was also a source, as were young venture capital firms in the area that would look at deals together.

“It was kind of a different world,” she said. “I come from a deal background. My primary focus was always looking at the investment opportunities and working on diligence and getting to know the entrepreneurs.”

Content was not a priority at the time, she said. Working with newbie investors and entrepreneurs was.

Louis Coppey, a venture capitalist who studied the platform trend while a graduate student at MIT, said many venture capital firms already use the platform model to highlight their expertise and stand out from the competition. It is unique for an angel group to take this approach, he said, since they typically have fewer resources than larger venture capital organizations.

Prominent venture capital firms using this approach to provide more services to portfolio companies include Andreessen Horowitz and First Round Capital, both based in Silicon Valley.

Coppey said content that shows off investors’ expertise can increase deal flow because entrepreneurs want to work with people who understand their work. But he cautioned that firms should take care to balance how many resources they commit to platforms. If the market for startups decreases, that means firms will have less money.

“When you need to cut, you’re first going to cut the cost of the platform strategy” rather than the salaries of investment management staff, Coppey said.

Managing director Wilkins said the group is committed to the platform approach of creating value outside financial capital for portfolio companies and investors. He said Miranda-Wolff was instrumental in creating the “people first” brand and strategy, which has attracted high-quality deals.

He believes that additional value is what now brings companies that could get capital from anywhere to Hyde Park Angels.

“We have gone from $4 million to $8 million (in annual investments) because our people-first strategy has allowed us really to find top entrepreneurs that are disrupting markets in a major way that we’re willing to invest behind,” Wilkins said.


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