TIGER Talk Recap: How Angel Investors Can Bring More Than Money to Your Startup
Entrepreneurs wanting to launch a business need financial backing, but they also need ongoing advice, guidance and the experience of someone who’s been in their shoes. Many entrepreneurs get the start they need from an angel investor.
Parker MacDonnell, Managing Director of Ohio TechAngel Funds (OTAF) and Terry Ziegler, Founder and CEO of T-Pro Solutions, presented “How Angel Investors Can Bring More Than Money to Your Startup” to a group of entrepreneurs at Innovate New Albany on August 19. The presentation was part of Innovate New Albany’s TIGER Talk series, which provides business owners with valuable information about technology, innovation, growth, entrepreneurship and responsibility.
Neil Collins, Onsite Leader of Innovate New Albany and President of Results Marketing Group, facilitated a talk-show style interview and discussion with Parker and Terry. Together they provided helpful clarification and information about what an angel investor is, the types of businesses they can help, and the different ways they can support entrepreneurs.
Parker began by defining different types of investors:
Angel Investors. Angel investors are individuals who invest their own money and time to help entrepreneurs succeed. If they don’t see the money again, it won’t change their lifestyle.
Venture Capitalists. Venture capitalists are being paid to raise money from other people, invest those funds, and get the right return. The stakes are higher for venture capitalists because if they can’t get the money back for their investors, it affects their finances personally.
Private Equity Investors. Private equity investors are interested in investing in companies that are already cash flow positive, and will be sold in a few years because of their estimation of future cash flow. They are not usually interested in the same types of deals as angel investors and venture capitalists.
Who can be an angel investor?
Parker said that anyone who has made his or her money by starting, growing and selling their own company, or who has worked in corporate America, can be an angel investor.
What types of companies could benefit from angel investors?
Through OTAF, Parker works with companies that fall into three industries: information technology, life sciences or advanced materials. He said companies in those industries tend to attract venture capitalists more rapidly, and attract strategic buyers who fit the product line into their own business, and sell the new product to more customers. The angel investors and company founders are aligned by one important goal: to sell their company in three to seven years and get a return.
What can an angel investor bring to your business besides money?
Terry’s company, T-Pro Solutions, has received funding through OTAF. After spending over 30 years in the consumer packaged goods industry, Terry started T-Pro Solutions to meet a need he discovered in the industry. He realized the potential in big data predictive analytics to figure out how customers buy, what they buy and why they buy. He was introduced to Rev1 and OTAF, and the big attraction for Terry was not just the money, but the support in other areas such as payroll, legal, financials, etc. He talks to his OTAF advisors every day. They sit on his board of directors, are there to support, and take on action items from each board meeting.
Parker added that OTAF prepares interested members to be effective board members. Their angel investors are highly trained and highly motivated.
Both Parker and Terry responded to questions from the group throughout the presentation.
OTAF was founded in 2004 by John O. Huston and is managed by Rev1 Ventures. With more than 300 high net worth accredited investors, OTAF is one of the largest in the US. They have invested more than $14 million in 50+ Ohio-based technology starts-ups, and just raised their fifth fund. If you would like more information about Rev1 and OTAF, visit their website.
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