Investments in Florida: On The Side Of the Angels
Angel investors are individuals who inject capital for startups in exchange for ownership equity or convertible debt. They are also called informal investors, angel founders, seed investors, among others. Their role basically consists in providing better conditions compared to other type of lenders, since they invest in the entrepreneur starting the business instead of the viability of the business.
Usually, angel investors are among an entrepreneur’s family and friends and the capital they provide might be a one-time investment to help the business start or carry on through its difficult early stages. In other words, angel investors are focused on helping startups take their first steps, without caring that much about the possible profit they may get from the business.
In order to become an angel investor in the United States, an individual must meet some requirements given by the Securities Exchange Commission’s (SEC). An angel investor must have a minimum net worth of $1 million and an annual income minimum of $200,000 since typically the investment is made with its own money. Essentially an angel investor is the opposite of a venture capitalist, who uses pooled money from many investors and manages it strategically.
Even though angel investors are frequently individuals, there are some entities that may provide the money for a startup. In Florida, there are some limited liability companies or investment funds which main goal is to look for opportunities and seed startups.
In this article, Patrick Dwyer presents a couple angel investors who can help entrepreneurs who are still financially having a difficult time during the startup phase of their business.
Emergent Growth Fund
This fund started in 2003 when 20 individuals — entrepreneurs, business professionals, and investors- came together in in the Gainesville and Ocala regions. Their main goal was to create an organization willing to engage in high-risk, high-return investments.
The Emergent Growth Fund works in cooperation with the Gainesville Area Chamber of Commerce, the University of Florida’s Office of Technology Licensing and the University of Florida Foundation. Those who want to become members of this organization must fill up an online application. So far there have been two rounds of membership application, each round with more than 50 applicants and a total amount of $2.5 million fund capital available.
This group makes an average investment on a prospective company ranging from $100,000 to $500,000, with investments that sometimes reach up to $1 million. They consider various features on investment qualifications: First, a candidate should have a significant technological edge and a high-class product or design. Second, it should also have a national or international market potential. Third, the candidate company should have an owner and a strong management team.
In order to prevent investors from losing their money, each startup business strategy should include an exit plan attainable in a maximum of five years. Startups should also be open to mentoring and guidance from the group members.
The New World Angels
This investment group is composed of members with a vast experience in management and operations in different industries and from different regions, all of them willing to facilitate lucrative investment deals for companies in the early or middle stage of development within the South Florida area.
The New World Angels’ investments are sourced-out from individual commitments of its members. The group is supported by the Enterprise Development Corporation, Florida Atlantic University, and Florida International University.
Even though there is a minimum investment amount, members can make specific investment decisions as to what company they want to invest in. Investors must closely assist the company they are investing in order to guarantee its success. This is the main reason why members of the New World Angel group should have business experience and be skilled enough to deal with the task.
If you want to become a member of the group, a current member has to invite you. Future members should apply anyway, and its application will be reviewed and approved by the board of directors.
The capital injected by New World Angels goes from $200,000 to $600,000 and it is usually given to companies in South Florida which are in the startup stage. The reason to this is that they prefer to invest in companies in the same region which they can easily monitor and mentor.
In order for this group to invest in a startup, it should have a highly viable business plan that includes every vital aspect of the business. Just like the previous organization, if your company wants to qualify as an ideal candidate, it should have a highly innovative technology, product or service to offer, that could be marketed in other regions.
If you want to read more about Angel Investors, click here.
