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News & Updates - Tuesday, June 26, 2007

YourTechOnline Is Virtual GeekSquad

Inc. Magazine runs with a cautionary story about having too many unsophisticated angel investors. The startup in the story is YourTechOnline, which says it has raised $700K from 25 angels. The point of the story is that the founder may have set expectations too high and the angels wanted it to go public and so they could all buy yachts.

As the brand says, YourTechOnline sells web-based tech support. YourTechSupport competes with Fixya, which recently raised $4M in VC funding and India based iYogi which recently raised $3.1M from VCs.

Based in Kelowna, British Columbia, YourTechOnline's founder Steve Wandler says he was forced to raise angel funding as, while moonlighting, he was cought taking customer support calls in his employer's bathroom. He also explains that in 2005, when the startup had grown to 15 employees in $500K in revenues, he found an interested buyer in the company, however, the buyer walked when it came face to face with the hodge podge of 25 angel investors.

The moral of the story, if you're going to raise angel funding, keep the pool small and let as few people as possible have voting rights by giving debt rather than equity.

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