One of the companies I have been advising is GateRocket. GateRocket was founded by friends of mine who took the chance of starting the company in their house with no income and no outside funding. You've got to love entrepreneurs like that. They're committed to the idea and willing to sacrifice alot to see it come to fruition. Something every investor should look for.
GateRocket offers a hardware and software solution to greatly speed up the verification of FPGA (Field Programmable Gate Array) designs. FPGAs are becoming increasingly powerful and complex. They are the highly functional chips that power many of the electronic devices we use every day. Although these devices are programmable, the complex designs can be challenging to test and verify. Founder Chris Schalick developed some unique methodologies for verifying these designs, filling an important gap in the marketplace.
GateRocket is angel funded. Many VCs are wary of investing money in the design tool space as the outcomes are generally limited. Conventional wisdom is that you have sell these kinds of companies to one of the big players in order for revenues to scale. That may be true in the GateRocket case, but I'm pretty confident that the angel investors will get a very nice return on their money. The outcome may end up being too small for most VC funds, but this is a segment where angels can really do well.
I've known Chris Schalick (and co-founder Stacy Swider) for years. They're smart and hard-working. It was a lot of fun giving them advice in my living room as they were just starting up. Now they've got a strong CEO, Dave Orecchio, who the angel investors brought in (nice value add!). The company has very nice customer traction and should do well.