Dec 8, 2014

Sign Up to receive Sacramento Business Journal's Morning Edition and Afternoon Edition newsletters and breaking news alerts. Sign Up Investors urge startup founders to 'be scrappy' to get off the ground Dec 8, 2014, 6:02am PST Send this to a friend Email address of friend (insert comma between multiple addresses): Your email address: Enlarge Photo Mark Anderson | Sacramento Business Journal At demo day for startups going through Velocity Venture Capital's bootcamp, Bing Gu pitched his company, California Sunlight, which developed an inflatable solar cooker. It folds up to fit into a pocket. It has third world, recreational and military applications. With Gu is Rick Noss, adviser to the company. Email  |  Twitter  |  LinkedIn  |  Google+ Angel investors — not venture capitalists — are the best source of capital for startups these days, a panel of investors told a room full of entrepreneurs Friday. They were gathered for Demo Day, when startup company founders make their final polished pitches to investors. The event follows a 10-week Entrepreneurs Showcase bootcamp for startups put on by Velocity Venture Capital . For years, venture capital firms is where startup entrepreneurs looked for money. But venture investors are now looking for more advanced companies — so the startup money is more often coming from angel investors. "Angel investors are the foundation base for startups," Hernando Guzman , fund manager with Latin Idea Ventures in Mexico City. He also counseled companies to work with ideas even without money. Rather than concentrating just on getting money, entrepreneurs should start the business so they have something to show investors, Guzman said. "You have to be scrappy," said Jack Crawford , general partner of Velocity Venture Capital. He's also an angel investor. Entrepreneurs always believe that all they need is capital to make the company successful, but they also need direction, mentors and customers, Crawford said. Those are things that angel investors can bring to startups. A company can get startup funding by assembling networks of angel investors, and those kinds of groups are growing around the country, said Jeff Harbach , executive director of the Central Texas Angel Network in Austin and a member of the Kauffman Fellows, an entrepreneurship organization. Angels represent a democratization of funding, said Carrie Walsh , managing director of Silicon Valley Bank's accelerator program. Because angel investors are spread out, it's not so important for the company to be based in Silicon Valley. Page 1