Touched by an Angel
A new investor group is on the lookout for up-and-coming companies in the Twin Cities area.
BY SUZY FRISCH
Startup companies just getting off the ground have a new friend in Twin Cities Angels, a group of angel investors who want to help these fledgling businesses succeed. The member-owned and managed Minneapolis- based company was created with the intention of investing in early- and seed-stage companies in the greater Twin Cities area.
Chairman John Alexander, a venture capital veteran and former executive at St. Jude Medical, saw a need for Twin Cities Angels because, he says, Minnesota just isn’t nurturing early stage companies like it used to. “You have to go back 25 years to see a significant success like Medtronic, Control Data, St. Jude, or Boston Scientific,” he notes.
The plan is for Twin Cities Angels to pool together its members’ financial resources and business savvy to help entrepreneurial companies meet their full potential. In exchange for an investment, the members will lead or participate in the formative stages of each up-and-coming business. That could include mentoring or simply sharing industry knowledge in such medical technology areas as devices, diagnostics, pharmaceuticals, biotech, and veterinary medicine, as well as the IT arenas of software, hardware, and services.
The group will focus on companies with strong teams, proprietary technology, and big markets, making investments of $50,000 to $1 million. A screening committee will look at 20 applications a month, forwarding two companies to present at the Twin Cities Angels’ monthly dinner meeting. If the members approve, the Angels will begin conducting due diligence, which might ultimately lead to an investment. The organization plans to invest in four to six businesses a year.
Membership in Twin Cities Angels is by invitation only, and members must be accredited investors with significant industry or functional expertise. Becoming a member of Twin Cities Angels involves making an initial investment, attending meetings, getting actively involved with deal flow, and assisting or contributing to due diligence. Potential members should be entrepreneurially minded and have an interest in doing hands-on angel investing and interacting closely with funded companies.
“People who are members are accredited investors looking to make better, smarter investments by working with others who have something to provide from their insight and experience,” says Alexander. “These are people who have succeeded in their own right, who have made some investments and want to do it better.”
By joining together, the 30 members of Twin Cities Angels will be able to research a larger pool of earlystage businesses. “The problem with angels is that they aren’t organized and there is so much work,” Alexander observes. “If you have a full-time job, you don’t have time to look at six to 10 deals a year. I might have time to look at two.
But if I’m part of an organization that can look at 10 to 30 deals, and I look at one but get the benefit of all the others, I’m that much better off.” And so will be many more early-stage companies in Minnesota that need seed capital to grow.