A new kind of venture capital approach is opening doors for entrepreneurs who might stand little chance of being funded under the old system, says Alliance leader Shereen Shermak, CEO of Launch Angels Inc. “Regulatory changes now allow smaller venture capital firms to market products more generally and broadly,” Shermak explains. “Now different folks are being reached with investment opportunities, and that allows us to ask the question – do they want a particular focus for their investing?”
The new opportunity flows from the JOBS (Jump Start Our Business Startups) Act of April 2012. Alliance Leaders were pleased to play a meaningful role in the development of that bipartisan initiative, especially Alliance Leaders Jeff Bussgang, General Partner at Flybridge Capital, and Tim Rowe, CEO & Founder of the Cambridge Innovation Center. Bussgang and Rowe were high profile advocates for the bill and were on hand to witness the signing of the JOBS Act at the White House.
Launch Angels’ innovation, which takes advantage of this new environment, is “affinity funds,” which are investment vehicles created by and for a group of investors who share a passion or an identity, and who want to join together to create opportunities for entrepreneurs. Launch Angels provides the technical expertise that allows investors with a particular goal to invest successfully.
Currently, Launch Angels is heavily focused both on its VentureOut affinity fund which invests in businesses led by or founded by lesbian, gay, bisexual, or transgender (LGBT) leadership, and also on the movement toward creating “university funds.”
The VentureOut fund, in particular, has garnered press attention as a first in the venture capital world. This population historically has found getting funded to be a difficult proposition under the traditional venture capital system.
The “university funds” provide the opportunity for alumni or affiliates of a particular university to invest in ventures led by student or alumni entrepreneurs from the same university. While Shereen is unable to disclose the funds on the horizon, she confirmed Launch Angels is seeing a rapidly growing interest among alumni in supporting their university’s entrepreneurial centers and alumni-led startups.
Shermak is upbeat about Launch Angels’ first year. “We’re confident that we’ve identified a need, and that we have the right product to meet it. And the Boston VC community has been very welcoming.”
Shermak comes to Launch Angels with long experience in entrepreneurship, especially product management, and financial management. She co-founded BuysideFX, where she was VP of Product and a member of the management team. She held a similar role at Currensee from 2009 to 2012, and also oversaw the Manager Selection Committee for the company’s Forex offering. Shereen spent five years as VP of Product at Boston-based startups and was previously in-house in product and strategy at State Street and Fidelity.
“Having been an angel investor myself, and also having played operational roles in the startup world, the opportunity to put these experiences together at Launch Angels was a logical next move for me,” Shermak said.
Shermak was alerted to the Alliance’s work by long-time Alliance leader Linda Moulton, former CEO of TRU Corporation Inc. Shermak took part in the Alliance’s Clearing the Path event in June which brought together over a hundred Boston-area CEOs and decision-makers to explore how to increase women’s role in business leadership, and eradicate the gender pay gap.
“It’s great to be part of something that brings together such a high-quality group of executives to address important issues in the business world,” Shermak explained. “I’m looking forward to the collaborations that will grow out of it.”