Angel investor groups see potential in northeast Indiana
By Doug LeDuc | Greater Fort Wayne Business Weekly
Plenty of untapped potential is available for the kind of individual investment that could contribute to greater business and economic growth in northeast Indiana, under the right circumstances.
The opportunities need to offer a return high enough to justify the risk involved, and individuals with the means for that kind of investing would need to learn about them.
Some local angel investor groups want to help accelerate that discovery process in northeast Indiana next year.
“What we’re going to look for is to educate current angel investors … and it can also be education for people who haven’t done angel investing but are interested in it,” said Eric Beier, president of the Fort Wayne chapter of VisionTech Angels. “We will try to be as educational as we can be. At the end of the day they’re looking for a return on their investment, so we want to help them understand what are the best practices.”
VisionTech Angels is the angel investing arm of VisionTech Partners, an Indianapolis-based company that connects investors with early-stage companies, which it has vetted for high potential.
Members of VisionTech Angels are accredited investors with a net worth of at least $1 million or annual income of at least $200,000, which qualifies them under securities laws as sufficiently sophisticated with investing for the most common, Regulation D, private placement participation.
As a group, these angels don’t put up seed money for a startup, but invest during its early stages of growth, coming in right after the friends and family money. They meet regularly at the Northeast Indiana Innovation Center to discuss potential investments.
Beier is an entrepreneur with a medical degree from Indiana University and a master’s of business administration from the University of Michigan. He serves as Fort Wayne-based Matrix-Bio’s CEO. He is a member of the Innovation Center’s board.
The local chapter of VisionTech Angels started with nine investors last year and ended the year with 11. This year, its numbers grew to 19 accredited investors. The group is always is looking for new members and anyone interested in learning more about it can contact him or one of its other members, Beier said.
Companies the group considers for investment operate with a profit margin of at least 25 percent, he said, and show potential for at least a tenfold return on a VisionTech Angels investment.
“We typically look for a 10 times return because we know that a lot of them are not going to have a return. A few grand slams really drive the return for the whole portfolio,” he said.
Finding local companies
The group has a goal of doing some of its investing in northeast Indiana, but finding an early-stage company in the region showing that type of promise is not easy. While it continues to look for one, Beier said it is trying persuade a couple of interesting prospects to move to northeast Indiana. One of the companies would have to relocate from Europe and one would relocate from Indianapolis.
In addition to growing its own investment group, VisionTech Angels is working with other groups including the Indiana Angel Network run by Robert Clark “to see how we can collaborate and connect angels to deals coming out of northeast Indiana,” Beier said.
The network plans to work with VisionTech Angels on presenting the angel investing education sessions next year. Clark, who also is on Elevate Northeast Indiana’s board, said he believes the effort eventually could increase the level of individual investment in northeast Indiana businesses.
Many individuals who could qualify as accredited investors would like to invest in solid, emerging northeast Indiana companies with high growth potential, but don’t know how to find them or carry out due diligence research on them, he said.
To have a properly diversified portfolio, they need to have between 5 percent and 10 percent of it in investments with the potential for very high returns, but they don’t know where to start, he said.
“There’s a lot of people like that around here, way more than you would think,” he said.
These individuals could benefit from the industry connections and diverse investing expertise found among the 200 members of Indiana Angel Network, Clark said.
“I talk to 125 founders and CEOs of startups and first and second (investment) stage companies a year, looking for quality investible deals,” he said.
To help stay on top of what is happening with startups and emerging companies in the region, Clark said he also meets regularly with Beier and Fred Nash, president of the local Main Street Venture Fund and Mark Hagar, managing member of the local Regional Angel Investor Network.
“Anyone reading this article could reach out to any of us to look at joining one of these angle networks and investing in regional startups,” Clark said. “They need to be accredited investors.”
Clark started the Indiana Angel Network in 2010 and its website said he has secured funding for more than 50 Midwest companies.