Raising "family & friends" money or angel funding has been the bane of entrepreneurs since the chicken-or the egg. But the boom of the 1990´s brought to light the problem and since, even with the bust, any number of angel funds have been launched over the past decade. In fact, the community has enough traction to have its own association, The Angel Capital Association.
I am constantly surprised and elated when I find companies which have raised angel funding. Earlier this month, I came across a Research Triangle Park company called Affinergy which raised its initial funding from two regional angel groups–Wilmington Investors Network (of Wilmington, N.C.) and Charleston Angel Partners.
When I read about these groups whose mission is to support area start-up companies with the long term goal of regional economic development, I thought: At long last! Bravo! I lived in Wilmington for a year or so in the early 1990´s and, while it was a great place to live, it had little going for it in the way of business opportunity, aside from the movie industry which has dribbled work Wilmington way since David Lynch shot “Blue Velvet” there in the mid-eighties. Yet, because of its proximity to the coast and Charleston-like charm, the community has a lot of wealthy residents and it´s encouraging to see that they are putting their money to good use.
The fund was launched in 2004 by entrepreneur Michael Cain who had been an active angel investor in the Research Triangle Park area. "I thought we needed something down here too," he said. "So I got a bunch of people together and we´ve been going strong since."
The fund´s long term focus is to invest in early-stage companies in North and South Carolina, focusing on technology, biotech and medical device companies. Currently, they have only made four investments, but strong ones by angel investing standards, putting in an average of $500,000. Aside from Affinergy (in which they just made a second round investment), the fund has invested in Wilmington Pharmaceuticals and is about to close on an investment with a Maryland-based company.
The Charleston Angel Partners (CHAP) typically invests $200,000 to $400,000 in a round of $1-3 million where other investor groups are involved. The firm is looking for fast growth in well-defined spaces where companies can show a plan to grow to a projected $50 million in revenue between 3 to 5 years. The firm generally invests in companies based in Charleston or from other cities, within a 300 miles radius (if they come to them with a lead investor). Portfolio companies include Bright View Technologies, Alveolus, Unitrends, Gentris and Affinergy.
Watch for future posts on "under-the-radar" angel and venture funds and send me your suggestions for profiles and/or war stories from experience seeking your own capital.