Now I Know Why Sig is the Godfather

Sig Mosley is the Godfather of Atlanta angel investing.

We all know why, right?

Not so fast.

I've been doing a series of interviews with Sig. My goal is to give my friend and mentor a forum to share what he accomplished in his 32-year career as the most prolific angel investor in Atlanta tech history. And also to allow him to share his vision and wisdom with all of us.

The most recent topic we discussed was "How to get in on the hottest deals: The Angel Group approach."

When I talked to Sig about angel groups, he wasn't sure there was much to talk about. But what I learned in our conversation rocked my world. I now understand why he is the Godfather.

Sig was the first professional angel investor in Atlanta. He and John Imlay decided in 1992 to put $4 million to work in early-stage companies. The goal of Imlay Investments was to grow the startup community of Atlanta by encouraging entrepreneurship. They stayed on this mission for 20 years. (After Imlay stopped investing, Sig continued on by creating a VC firm, Mosley Investments)

During his time leading Imlay Investments, Sig invested in 122 deals. He served on 45 startup advisory boards.

It was these amazing statistics that blinded me to his real contribution.

The Angel Round Investment LLC (aka The Special Purpose Vehicle)

Sig found deals. He quickly gained a reputation in Atlanta tech as a professional angel investor with money and network. This reputation allowed him to achieve the best returns by getting the first look at all the deals in the market. This is true for angel investing success and also for venture capital success. If you get to see all the deals seeking funding first, your odds of outsized success skyrocket. Sig, as the man on the street for Imlay Investments, got first look.

For the first couple of years, he invested in these deals as a solo investor. During this time, he started to get passive angel interest in his investing activity. They approached Sig and asked, "Can we get in on your deals?"

This changed everything for Imlay Investments and the startup community of Atlanta.

Here is how it worked:

1. An entrepreneur looking for funding would find Sig.
2. Sig would vet the deal to see if he was interested. If not interested, they always got a quick "No." (which led to the famous tee shirts printed with: "Sig said, No.")
3. If interested in the company, Sig would do the due diligence, determine how much money was needed for this early-stage round, then negotiate the investment terms. He created the Term Sheet.
4. Sig would then float the deal to the angels who were interested in Sig's deals. He would give these angels the opportunity to come to a company presentation by the entrepreneur at the offices of Imlay Investments.
5. After the presentation was over, he would summarize why Imlay Investments was investing. Sig would then ask each of the passive angels in attendance if they were in and for how much. He never advised the interested angels on whether to invest or not. It was totally up to them.
6. Sig then created an Limited Liability Company (LLC), registered with the State of Georgia, for this particular round in this particular company.
7. The terms of the LLC named Sig as the manager with complete authority. He required each investor to sign a power of attorney granting this right to him.
8. Sig would manage this LLC at no charge and with no carry. There was no benefit to Imlay Investments, no remuneration, no expense reimbursement. Sig would communicate what was happening at the company, do the tax return for the LLC, and distribute the K-1s. All this work until the deal exited or the company wound down. At this point, he would distribute any funds, do the final tax return, and finally liquidate the LLC.

I didn't know Sig did all this. I asked him, "How many unique passive angels invested in all these LLC's you created over the 20 years of Imlay Investments?"

He thought momentarily, then said, "Around 400 investors."

400 unique angel investors. Think about this.

This is why Sig is the Godfather of Angel Investing in Atlanta.

He brought 400 angel investors to the table. He provided them with a way to invest in startups that was easy, painless, and professionally managed by Sig himself.

If each investor, during their investment activity with Imlay over twenty years, invested an average of $100,000, this means Sig brought over $40 million from angels into the startup community.

Another of Sig's deal criteria was that he only invested in early-stage companies that would require VC investment if they were successful. Think about how many millions from VC's Sig brought to our community.

These 400 angel investors, plus the VCs, plus his 122 deals make him the Godfather of Angel Investing in Atlanta.

Because of Sig, as the leader of Imlay Investments, we now enjoy a vibrant startup community. The next generation of Atlanta angels is building on the foundation that was created from scratch by Sig and John Imlay.

I thank God for their commitment to our community, their vision for a robust startup ecosystem, and their efforts in making it a reality.

And this next generation is wasting no time. In the last five years, we've witnessed our first billion-dollar angel. I am sure there is more to come, all thanks to the Godfather of Atlanta Angel Investing, Sig Mosley.