Seminar Targets Investors with Angel Potential

The managers of some of Oklahoma’s economic development efforts are looking for a few angels to sit on the shoulders of up-and-coming entrepreneurs.
A seminar for those interested in learning about angel investing and expanding their early stage investment skills is set in Tulsa Jan. 11 and Oklahoma City Jan. 31.
The intent of the Power of Angel Investing seminar, an Ewing Marion Kauffman Foundation program “is to provide best practice information to angel investors,” said Tom D. Walker, executive vice president and COO with i2E, 2 W. Second St.
i2E, which is hosting the seminar, is the program manager for Oklahoma Technology Commercialization Center and the Oklahoma Center for the Advancement of Science and Technology (OCAST) Technology Business Finance Program.
This seminar features local experts in high-growth ventures and early stage investing opportunities, including seasoned angel investors with diverse investment experience, tax and legal experts, and angel-financed entrepreneurs and targets accredited investors, said William Payne, a consultant for the Kauffman Foundation who will lead the sessions.
Payne said many potential investors do not know how angel investing fits into the variety of sources of capital that are available for entrepreneurs to start and grow their businesses.
“Surprisingly enough, even people who have been in business all their lives don’t have a really good handle on the process for making an angel investor,” Payne said.
“How do you screen deals, what do you look at, what do you look for in deals, how do you do thorough due diligence on whether or not you want to make an investment in a deal you like, what are the pitfalls, what are the deal breakers, what are the deal makers, how would you value a company?
“If you are going to put $500,000 into a company, does that earn you 30 percent of the company, or 50 percent of a company or 10 percent of a company?” said Payne.
Angel investors are a class of private investors who offer more than financial support, he said.
“We invest time and money in companies, and many entrepreneurs say that the time piece is maybe more important than the money piece,” Payne said. “The time comes in the form of mentoring, coaching and serving on boards of directors.”
He said changes in funding for entrepreneurs have driven the need for angel investors.
“What has happened in the capital food chain for entrepreneurs is that while venture capitalists and angel investors tended to overlap a lot in the level of funding they would provide, they no longer do so,” Payne said. “So there is a specific funding arena where angels are the only players.”
“If you don’t have angel investment, and a company is looking for $500,000 or $750,000, it is pretty unlikely that friends and family are going to be able to put that level of money together,” he said.
“And it’s also pretty unlikely that VCs will invest that smaller amount of money because VCs are looking for bigger deals. Angels really fill the gap between $250,000 and maybe even as much as a $2 million, through perhaps syndication of various angel groups is necessary to get the job done,” Payne said.
Walker said that at any given time in Oklahoma “there is a minimum of a $25 million gap in funding for companies in the seed to early stage of development.”
“Our mission at i2E is assisting home-grown advanced technology companies to start-up and grow in Oklahoma,” he said. “Access to seed and early-stage capital is critical to these companies. So, we’ve always had a focus on developing angel capital programs and services in Oklahoma.”
For more information on the seminars, visit www.i2E.org. ?



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