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A new study published by professors at the Harvard Business School shows that angel-backed companies are more likely to succeed and show more growth than those funded by venture firms alone. Researched and written by William Kerr and Josh Lerner, the report found that companies with angel funding see between 30% and 50% higher growth figures in terms of website traffic, are more likely to survive for four years, and are also in a better position to receive further rounds of funding. Sponsor Angel investing itself has seen large growth over the last several months with the creation of various organizations, events, firms and legislation to spur it on. We've discussed the Open Angel Forum series of events, the creation of "Super Angel" firms , the curated Venture Hacks AngelList , as well as current legislation both helping and hurting angel investments. Angel investing has become more common, and as this report shows, this is largely due to the value and success it tends to breed. But why are angel investments the secret sauce for some companies? As the report points out, its the intangibles that angels bring to the table that could be playing a large role in company success. "Access to capital per se may not be the most important value-added that angel groups bring. Some of the 'softer' features, such as angels' mentoring or business contacts, may help new ventures the most," the report says. One of the other reasons that companies could tend to be more successful with angel funding is because of the human face placed on the investments. Angels are usually investing in companies at an early stage, and are investing their own capital in the company. Entrepreneurs may be more likely to work that extra bit harder when they know they are playing with the personal cash of an actual person, not the collected funds of an entire firm without a human name. The reputation of the angel could play a large role as well, both for the attitude of the people running the company, and for the audience they are looking to attract. Most angels tend to be successful entrepreneurs themselves, and thus are likely well known in the startup scene. The chance to sit and talk with these investors, let alone receiving funding from them, is likely a treat for most entrepreneurs, so they may be more likely to be more careful with their money. Additionally, when the public hears of a new startup that may not immediately interest them, the mention of particular angel investors can change their mind. As angel investors mature, they build their own personal portfolio of companies they noticed and provided early funds for, so when company XYZ launches with angel funding from an influential angel investor, that alone can attract people to the product. I know personally that I have looked into startups I otherwise would have largely ignored simply because an important angel investor was certain they'd be a hit. "Some of the 'softer' features, such as angels' mentoring or business contacts, may help new ventures the most." - Harvard Business School report Since some companies receive early financing rounds from angels, it is also logical to assume that when working with a limited amount of cash, the entrepreneurs may be more focused on doing more with less. A company that bursts out of the gate with large amounts of VC firm funding may spend it slightly more haphazardly, whereas a company running on limited angel funds may adopt leaner practices and take baby steps toward success and future funding. As the report mentioned above, the "softer" features provided by the angels are also a large help to the companies. In his email newsletter yesterday, angel investor Jason Calacanis discussed loyalty and how he goes to bat for the people who are loyal to him and his companies. He mentioned that whenever he invests in a company, he immediately becomes an evangelist for that company and it's founders, doing all he can to promote it. This may not be the same for all angels, but when influential investors like Jason get behind your company, they do their best to make sure good things happen. I would be interested to see similar data from this report that compares companies with solely angel funding versus those with more traditional VC firm funding mixed in. The influence of angel investors is significant, but I would think the angels alone are not enough to create more successful businesses at a higher rate. But the lesson here is, if your startup has the opportunity to include some angel investors (especially at the early stages), it would seem like a wise decision to go ahead with. Photo by Flickr user Brooke Anderson . Discuss
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Angel-Backed Companies More Likely to Succeed, Says Harvard Study
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Nearly 15 years ago, libraries were still primarily a place to go check out the printed, bound word. Only 28 percent offered Internet access, whereas today, almost all public libraries offer access and are helping to bridge the digital divide, according to a report by the University of Washington on Internet use in libraries across the country. According to the report, "the wiring of public libraries has transformed one of the nation's most established community resources into a critical digital hub". Sponsor Every year, 169 million people visit their local public library and 45 percent of them access the Internet, according to the report. The report, which focuses its numbers of people 14-years old and older, is based on nearly 50,000 surveys from patrons of more than 400 public libraries across the country. As Seth Godin pointed out last January, libraries "can't survive as community-funded repositories for books that individuals don't want to own" and that the "number one thing they deliver to their patrons is free DVD rentals." Now, we can add "Internet access" to the top of the list, as "Internet access is now one of the most sought after public library services", according to the report. The report notes that patrons use the Internet for a variety of tasks - from job searches to civic participation to finance to school kids doing their homework - but offers an interesting stat right off the bat. Of those people using the Internet at the library, "more than three-quarters of these people had Internet access at home, work, or elsewhere." The library, it would seem, offers a respite from the coffee shop, a refuge from familial fights over the single home computer and an alternative to the dizzyingly slow dial-up Internet that so many still have to deal with. But what are they doing with this new found Internet provider? Another telling number, though, was that 60 percent of respondents said they use library computers to maintain "social connections" and we can't help but wonder if libraries are giving people a safe place to Facebook-lurk. That is, many places of employment and schools ban social networks - are libraries a way around that for workers and teens? Overall though, the report does seem to show that libraries are a "technological lifeline to children and families in need", with 44 percent of people in households below the federal poverty line using public libraries for Internet access. And while we may make fun of Facebook occasionally, social networking can be a key tool in finding employment and networking. But beyond that, we can see that employment, education and health information are among the top use cases. In the end, the report calls for continued support for a public system that seems to be the biggest bridge for the digital divide . It is certainly a shift in focus, but we hope that any hard feelings over digital taking away from the printed word don't get in the way of keeping public libraries funded. As the report reads, "The findings signal this is a moment when federal, state, and local governments should invest more, not less, in the computing capacity of the nation's libraries to help advance a wide range of policy goals." Discuss
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Report: Last Bastion of the Bookworm Becomes Internet Hub
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In 2005, the U.S. still ranked as the most networked country in the world according to the World Economic Forum's Global Information Technology Report . This report, which provides an extensive analysis of the economies and network infrastructures of 133 countries, has now demoted the U.S. to fifth place and ranks Sweden, Singapore, Denmark and Switzerland as the most networked countries in the world. With regards to broadband adoption, the U.S. only ranks 22nd in the world. Sponsor U.S. Has Some Catching Up to Do As the report notes, the U.S. still boasts an environment that is highly conducive for information and communication technologies. The U.S. still ranks first when it comes to IT usage in business and fourth for IT usage in government. On an individual level, however, the U.S. lacks behind many other countries, mainly due to the low mobile subscription penetration rate - where the U.S. only ranks 72nd in the world - and the relatively low number of broadband subscribers (22nd). The report's authors base this assessment on information from 2008, however, and according to some data we saw earlier this year , broadband penetration in the U.S. was actually down in 2009. China and India China, which ranked at the bottom of the report's annual rankings in 2002 (64th out of 74 countries) has now moved up to 37th place (out of 133 countries). India, too, continues to climb up the the World Economic Forum's rankings and has now moved up to 43rd place. Discuss
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Sweden is the World's Most Networked Country - U.S. Drops to Fifth Place
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The AFP is reporting that the person who leaked internal business documents from Twitter Inc. to the blog TechCrunch last July is also the same person who compromised the Twitter accounts of Barack Obama and other celebrities last year. A 25-year-old who went by the name "Hacker Croll" has been tracked down and arrested in France by French authorities, with the assistance of the FBI. It's not clear from the report what charges are to be filed. Reportedly, the FBI alerted France to the man's presence in that country almost a year ago, in the same month the internal documents were leaked. Sponsor The media report doesn't make mention of the leaked documents, only the illicit takeover of Obama's account. "Hacker Croll" was identified as the source of the controversial files, though. It seems possible that these two incidents are being improperly connected, but the report filed indicates they were carried out by the same person. We've reached out to both Twitter and TechCrunch for comment. When the documents were sent to TechCrunch, that blog deliberated publicly at length about whether it had a journalistic obligation to publish or suppress them. Founder Michael Arrington in the end decided to work with Twitter executives to identify the most sensitive documents but published other, less sensitive information days later. The resulting blog posts provided a very interesting look into the thinking of one of the most important companies on the Internet, but proved severely damaging to TechCrunch's reputation with people in the industry who considered the decision to publish them an unacceptable betrayal. TechCrunch argued that it was within its legal rights to publish the information, and the law breaking had been done by the person who sent them the files. Now that person is apparently headed to trial. The ethical and perhaps legal implications of TechCrunch's decision will no doubt be discussed again due to this turn of events. The one clear lesson from all this that no one can argue with, though: Don't mess with Twitter or the FBI will hunt you down where ever you may be around the world. Discuss
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Twitter Hacker, TechCrunch Document Leaker, Arrested in France
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We're pleased to announce ReadWriteWeb's latest premium report, Augmented Reality for Marketers and Developers: Analysis of the Leaders, the Challenges and the Future . This report will help you develop a sophisticated understanding of Augmented Reality (AR), the mobile and web technology that places data on top of a user's view of the physical world. The research included will help you decrease your AR development time to market by learning from the first wave of early adopters. AR offers a new marketing and product paradigm for a high impact, high value customer experience. More than 1,000 AR campaigns were kicked-off last year and we expect to see many more in 2010. In this report, we profile key AR development companies, their campaigns as well as development lessons learned. Sponsor Want a quick visual introduction to Augmented Reality? Check out the following video from our friends at Common Craft, just released today and available for licensing from their website . Ready to jump into the nitty gritty of AR for marketing your company's product? That's what our report is for. Here's what you'll find in ReadWriteWeb's latest report . The report is divided into three parts. PART 1: The AR Market Defined - provides a succinct introduction to Augmented Reality (AR), its history, current size, how fast it is scaling and key players in the market. PART 2: AR Supplier Profiles - profiles 10 leading companies specializing in the development of Augmented Reality applications for their clients. PART 3: Summarizes results of a survey of AR developers providing insight on key controversies in the field, project requirements, cost categories and duration of development. Survey of Experienced Developers The survey of experienced developers included in the report has unearthed some information about AR implementations that you won't be able to get anywhere else. How important is it for companies to use existing AR browsers as opposed to building their own stand-alone mobile AR apps? Hidden costs associated with AR app development. Developer experience requirements for AR app development. Timeline for development of AR apps. Total cost and cost break down for developing a Webcam AR project. When live video processing will be enabled on popular mobile phones? This is critical for the next stage of AR, because it will allow for apps that are responsive to what's actually being looked at instead of just what's expected to be in a given location. Also check out our other ReadWriteWeb Premium Reports , which will give you a competitive advantage by enabling you to understand key Web trends such as The Real-Time Web and its Future , and The Guide to Online Community Management . Keep an eye out for our next Premium report coming soon, which will cover best practices for location data acquisition and user privacy! Discuss
Excerpt from:
Augmented Reality for Marketers and Developers: Our Newest Research Report
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