On the Radar…

Today, David Cohen announced the formation of a $2.5 million angel capital seed fund. The vehicle, focused on web and software companies, plans to invest in twenty startups over a five year period. Investments will likely range from $50,000 to $200,000, and the fund will consider firms nationwide – including those startups exiting the TechStars program, of which Cohen is Executive Director. According to Cohen’s blog, the fund is partially funded and advised by the following technology professionals: Jason Mendelson and Brad Feld of the Foundry Group, hedge fund manager Howard Lindzon, Lisa Rutherford of Vista Ventures, and Howard Diamond of Rendezvous Entertainment. When contacted about what he’s looking for in potential investments, Cohen responded, a “strong team, great market dynamics, [and an] early prototype to in-market product.” The portfolio companies – of which the first has already been chosen – will gain the benefit of dollars as well as Cohen’s experience and formidable contacts within the technology space. When asked the rationale for launching an angel fund in the midst of a recession, Cohen replied, “The current economic downturn has dramatically increased an already pronounced seed funding gap. Angel investing activity is down significantly as high net worth individuals no longer meet this need. Meanwhile, entrepreneurial activity has not lessened and thus more and more high quality early stage companies are struggling to find funding or to fill out investment rounds. I believe that this fund enters the market with excellent timing and is poised to take advantage of these factors.”