Jen Zoghby Staff Writer
Despite a lackluster venture capital scene, a Davidson College alum plans to launch an angel-investor forum later this month. Gathering of Angels will link companies from across the country with wealthy local investors.
Founder Tarby Bryant returns to his North Carolina roots with the extension of the group originally launched in 1996 in Santa Fe, N.M., his current home. Bryant also has started networks in Scottsdale, Ariz.; Carmel, Calif.; and Atlanta.
The new group follows plans by The Ben Craig Center, a local small-business incubator, to establish a regional angel network later this year.
Although venture-capital investment has fallen off statewide, angel investing is a hot ticket in Charlotte, where groups such as Bryant’s are looking to attract wealthy investors who may be dissatisfied with the stock market.
“We’re part of the food chain that’s gotten larger because the venture capitalists aren’t making seed and early-stage investments,” says Bryant, who also runs Santa Fe-based Anasazi Capital Corp.
In fact, venture capitalists aren’t making much of any sort of investment these days. For the first six months of the year, venture capital investments across the state were 90% lower than their high in 2000, coming in at $195.6 million — a fraction of the $1.9 billion total of two years ago.
Several local companies have received funding this quarter. V3 Systems, a Ballantyne software firm, closed a $11.5 million round last month. Meanwhile, ParinGenix Inc., an early-stage, drug-development company, received $4 million in a deal arranged by Charlotte-based Academy Venture Fund.
Still, the money isn’t gushing in Charlotte the way it did during the technology boom.
And more focus on angel investment can help improve the landscape, says Brent Kulman, fund executive for Charlotte Angel Partners, a fund that requires $50,000 contributions from each of its 100 members.
He says the greater the focus on early-stage investment, the better. “I think it’s a positive thing because it gives investors exposure in the marketplace.”
Kulman, whose fund still has money to invest in additional companies, says he sees a slight increase in the deal flow since earlier this year.
Stacey Moore, who runs Mentor Capital Management in Charlotte, says the group will generate interest in angel investing, which in turn will help other early-stage funds in Charlotte. “It’s a good way for people who haven’t gotten involved in angel investing to test the waters.”
At Gathering of Angels, five companies will present business plans to the participating investors.
For the inaugural Charlotte meeting, two companies are from Atlanta, one is from Dallas and one is from New Haven, Conn. The fifth company, which hasn’t been named, will come from the Charlotte region, Bryant says.
A typical investment by the group ranges from $150,000 to $200,000, Bryant says, although deals have involved investments as small as $50,000 and as large as $1.5 million.
Gathering of Angels charges the companies a $1,500 presenting fee and takes a 5% success fee if a funding deal is closed.
To date, the groups have raised money for some 65 companies, Bryant says.
The presenting fee covers expenses for the event, which is free to angel investors, as well as advertising for the meetings, Bryant says. Companies are allowed to give a 59-second update to angel investors at subsequent meetings without an additional charge.
Bryant says his model is to offer an introduction between companies needing cash and high-net-worth individuals looking to diversify their portfolios.
Qualified investors must have $1 million in net worth or steady annual income of $200,000 for a single person or $300,000 for a married couple.
Santa Fe supper
Bryant schedules his events for 5:30 p.m. to 8 p.m., which includes 20-minute presentations per company. Although Bryant provides a light Southwestern dinner of quesadillas and burritos, he wants to leave the businesspeople and investors time — and a hunger — for a dinner later that evening.
“Funding will occur if the magic is right,” he says.
Entrepreneur David Worrell will lead the local Gathering of Angels. Worrell, who helped start Monterey Venture Partners in the Silicon Valley, has assisted companies in procuring an estimated $10 million in funding during the past four years.
He is now vice president and director of corporate development for The Chicago Tokyo Group, a consulting company that introduces medical technology to the Japanese market.
Worrell says the Gathering of Angels concept should work well in Charlotte because of the city’s demographics and because the network offers a free, no-hassle way to learn about investment opportunities. “We’re looking to get ‘the millionaire next door.’ ”
Mike Wachholz, who recently joined the Ben Craig Center as director of investment banking services, is still working out the details for that angel-investor network. Of Gathering, Wachholz says: “The more, the merrier. If they’re helping companies get funding, that’s great.”
Research director Amy Shapiro contributed to this report.
© 2002 American City Business Journals Inc.