Since this is the first time I've ever posted a blog, please allow me to introduce myself. I've had the pleasure of working at JumpStart since January 2006 helping our entrepreneurs identify capital sources for follow-on funding. In addition to working with early-stage venture funds throughout the country, I am always on the prowl to uncover prospective angel investors who have a passion for entrepreneurship. It's a terrific job. I get to spend my time working alongside entrepreneurs with fascinating ideas and smart investors who are dedicated to building our region's most promising companies.
Recently, I read a great posting in PeHub about the importance of Angels in the early stages of a company's funding (Angels are the New Rock Stars). Author Dan Primack touched on several things that our portfolio companies experience all of the time in Northeast Ohio.
First and foremost, Angels are loved! Angel investors usually work closely with the entrepreneurs they've invested in. Most angel investors want to invest more than just their money, they are passionate about helping other entrepreneurs build a successful company. I find that a lot of dedicated angel investors have the luxury of choosing how to spend their days. Most angel investors joke that they would rather work with entrepreneurs than golf every day. Our entrepreneurs welcome the valuable guidance and support that isn't as prevalent with institutional investors.
Angel investors can be impulsive. In some regards, this is still true. However, over the past several years, the organizational efforts in Northeast Ohio have added structure to a majority of our region's angel-funded rounds. The North Coast Angel Fund (NCAF), Akron ARCHAngels and the Medical Growth Fund are examples of angel groups that actively invest with screening committees, approval processes, and due diligence teams in place. Also, JumpStart launched IdeaCrossing to connect entrepreneurs with investors and service providers. This tangible progress leads to a better investing environment overall and early-stage entrepreneurs are benefiting from our community's increased knowledge of what it means to be an angel investor.
Angel investors are loud. There has been a lot of press lately about the increase in organized angel groups and angel funding. Angel investors should spread the word -- especially Ohio Angels! Ohio is home to over a dozen formal angel groups and the Ohio TechAngel Fund's Chairman, John Huston, recently ended his tenure as the Angel Capital Association's Chairman. We've gained visibility in the national spotlight for being a state that encourages early-stage investing. State programs such as the Third Frontier's Pre-Seed Fund Initiative and the Technology Investment Tax Credit give incentives to investors that reduce some of the risks associated with angel investing. Ohio's dedication to early-stage investing is evident in the amount of companies that have been funded. For the first time ever, Ohio was ranked nationally in the top 10 for the number of companies that received venture investment. This includes angel-funded transactions, which accounts for a large number of the 2009 funding rounds. Regionally, 2009 was a record year for NCAF with eight new investments (the group invested in four companies each of the prior two years).
Angels seek visibility to gain better access to deal flow. I've talked with angel groups and venture investors around the country and can confirm that, when it comes to accessing pre-qualified deal flow, the Northeast Ohio entrepreneurial ecosystem is recognized as a national leader in priming early-stage, high growth companies for investors. JumpStart, GLIDE and North Coast Opportunities Fund are a few initiatives that source and prepare companies for angel/venture investment.
If you were ever considering becoming an angel investor, now is the time. Angels are critical to the success of early-stage companies. Since 2004, JumpStart portfolio companies have raised approximately $114 million in follow-on capital and 32% came from angel investors. Entrepreneurs need smart angel investors to provide the guidance and support to grow their companies. JumpStart has several educational sources for prospective angel investors. Check out some of the resources in this posting or feel free to contact me if you have any interest in learning more!
Angels, we need you! Plus angel investing is a lot of fun -- definitely better than golf!
Kerri Breen joined JumpStart Inc. with several years experience in capital markets and banking. Prior to JumpStart, Kerri was a Vice President in the Syndicated Finance group at KeyBank where her emphasis was on structuring and distributing large corporate lines of credit and construction loans. From 1997 to 2002, Kerri served in the Investment Banking division at McDonald Investments, where she was involved in public and private offerings of debt and equity securities, corporate mergers and acquisitions and real estate asset dispositions. Kerri received her MBA with a focus on finance from the Weatherhead School of Management and her BA in marketing from Ohio State University.