Angel Investing in the Digital World: Day 2 at Southwest Regional Angel Summit

At day two of the 5th annual Southwest Regional Angel Summit, Alan Alexander gave a presentation titled “Angel Investing in the Digital World: An overview of the state of Internet ventures and pointers for investing in the murky waters of this dynamic industry.”

Alexander is a member of the Desert Angels investment group and has over 35 years experience as a marketing and advertising professional.

The talk began with a broad overview of the history of Internet ventures, describing the dot-com bubble that burst in the year 2000. Despite the great collapse, companies such as Amazon and eBay survived and demonstrated the huge potential of an Internet start-up.

Today there is extraordinary buzz again surrounding Internet companies. Why are people so interested in investing in the digital world? Alexander explains that investors are drawn by the potential of an Internet venture to transform our world, making an industry more efficient and profitable. “When was the last time you booked a hotel reservation or plane ticket over the phone?” he asks.

Alexander broke down the different types of Internet ventures: Business to Consumer (such as OpenTable and Pandora), and Business to Business (EffortlessHR, GoToMeeting).

He also spoke about the various revenue generation models of Internet ventures, including advertising, subscription, lead generation, commission, and retail.

Current digital investing trends include Incubators/Accelerators (TechStars, Y Combinator), VC Seed Funds (iFund, First Round Capital), and Super Angels (Felicis Ventures, Floodgate).

As internet ventures continue to affect just about every American industry, Alexander says we are entering the “age of the customer.” Companies that provide benefits to their customers in an efficient and beneficial way will continue to be profitable and transform our lives.