I was recently asked the question: “Is Panache Ventures a venture capital fund or an angel fund?” Let me shed some light on how we think about this topic. To begin, let’s look at the definition of each fund and how we characterize ourselves.
According to Wikipedia: “Venture capital (VC) is a type of private equity, a form of financing that is provided by firms or funds to small, early-stage, emerging firms that are deemed to have high growth potential, …”. Panache Ventures clearly fits that description: We are a seed stage venture fund.
Interestingly, “Angel Fund” is not defined in Wikipedia and it redirects you to “Angel Investor” which could mean that angel fund is a relatively new concept as an investment vehicle. In my quick search over the Internet, the closest I came to the definition of an angel fund was with the Merriam-Webster dictionary (of all places) which simply states: “a fund of investment capital from a network of angel investors”, which clearly makes a lot of sense.
So, is Panache Ventures an angel fund?
Well, Panache Ventures currently has over 40 investors that are active angel investors, which would probably make us one of the largest angel funds in Canada. To build on our angel network, we created an Angel Partner Program to leverage the ultimate power of the angel community and help our portfolio companies with additional capital and access to expertise. Both managing partners (Patrick Lor and myself) at Panache Ventures have been active angel investors for the past 2 decades and we clearly understand the value of the angel community, leveraging all the connections we have in this valuable ecosystem that is growing tremendously year-over-year. So undoubtedly, Panache Ventures is also an angel fund.
While the venture industry delineates distinct roles between VC funds and angel funds with pros and cons for each, Panache Ventures is leading the way to combine the best of both worlds in order to create this new class of best-of-breed early-stage funds. Rather than segregating these two types of investment vehicles, there is an opportunity to merge these two groups together to better serve the startup ecosystem.
Panache Venture is consequently a hybrid between an angel fund and a VC fund, which unites the professional skills of VC funds with the personal expertise of angel funds; at the end to better serve the needs of our startup community, as a founder-friendly fund with better means at our disposal. We tag ourselves as a “venture capital fund powered by angels” although we don’t mind if you think of us as an “angel fund powered by venture capital.”