January 2007
The Center for Innovation worked with groups of angel investors in Grand Forks, Bismarck and Fargo to form Angel Capital funds affiliated with RAIN Source Capital of St Paul. MN www.rainsourcecapital.com. The Valley Angel Investment Fund, LLC in Grand Forks, N.D; the Northern Plains Investment LLC of Bismarck-Mandan, and the FM Angel Investment Fund LLC of Fargo are initially capitalized at more than $500,000 with plans to expand up to $1.5 million.
The three Angel funds will invest primarily in early- to mid-stage private companies with high growth potential that are located in North Dakota and Minnesota, and other regions where the investors reside.
“These new Angel Fund supports both business and investor growth,” said Steve Mercil, president and CEO of Minnesota-based RAIN Source Capital. “Our goal is to form one RAIN fund a month ~ as a way to increase the capacity for equity investments in smaller more rural areas. We are extremely excited to be working with business leaders and angel investors in this community, given the region’s innovation and strong work ethic.” RAIN stands for Rural Accredited Investor Network (RAIN).
The Grand Forks RAIN fund currently has 17 members, including angel investors, lending institutions, and RAIN Source Capital, which have pooled their investment dollars to create the fund. Angel investors, typically defined as individuals with annual income exceeding $200,000 and/or having a net worth of more than $1 million, are often self-made, cashed-out entrepreneurs who have capital and business experience, and are interested in helping other companies to grow. In 2006, angels invested $25.1 billion in 49,500 U.S. businesses.
With the 3 North Dakota RAIN funds there are now 19 RAIN® funds affiliated with RAIN Source Capital, which includes a multi-state network of angel funds that invests in growing companies. Each individual RAIN fund determines what industry it will focus on, and the type and level of financing to provide, based on the interests and expertise of its members. In addition to investing in local companies, the Valley Angel Investment Fund may also co-invest with other RAIN® funds.
“Our group is particularly interested in high potential growth companies related to value-added processing, university R&D spin-out ventures, expansion and add-on investments,” said Tom Kenville, chair of the Valley Angel Investment Fund. “We’ve had strong interest in the fund to date, and we believe it has the potential to create more jobs and generate more wealth in the area. And, of course, those of us involved in forming the Valley Angel Investment Fund are also hoping that the investments will pay off for us as well. It’s a good way to support the region as well as start-ups like those at the Center For Innovation.”
The Valley Angel Investment Fund will consider adding new members until $1.5 M is raised. Interested accredited investors may contact Tom Kenville at tom@tglobalweb.com or at (218) 779-9950. Contact for Northern Plains Investment is Dewey Tietz at (701) 527-0539 or dtietz@crosscountrycourier.com Contact for FM Angel Investment Fund is Terri Zimmerman, terri@ndsuresearchpark.com. Entrepreneurial companies interested in being considered for funding may contact Bruce Gjovig at the Center for Innovation , 701-777-3132, Bruce@Innovators.net
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RAIN Source Capital is a multi-state network of RAIN funds that works with angel investors who are interested in supporting growing companies. RAIN SourceSM helps bring together like-minded angel investors to form individual RAIN funds ~ and then provides these funds with additional capital, a process for due diligence, legal templates, management support, access to deal flow and other resources. RAIN funds share expertise, deals and experience between and among RAIN Source Capital’s multi-state network of RAIN funds, to support growing companies throughout the area. RAIN funds range in size from seven to 61 members, who have pooled anywhere from $500,000 to $2 million. www.rainsourcecapital.com.
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The Growing Number of Angels
IIndividual angel investors continued to form organized investor groups with the number of angel groups increasing by nearly 60 percent in the past three years, from an estimated 150 in 2002 to 250 last year, according to an analysis by the Angel Capital Education Foundation (ACEF) and the Ewing Marion Kauffman Foundation.
The survey also revealed that the average angel group invested $1.45 million and that the average angel group invested $266,000 per round and $387,000 per company during calendar 2005. While investments by angel groups are a small fraction of the estimated $23.1 billion in total angel investment last year, the analysis indicates that the professionalism and sophistication of angel groups is increasing along with the number of groups.
The analysis was released at the ACEF’s recent annual North American Summit and the PowerPoint noting the statistics is available at www.angelcapitaleducation.org. |
