PHILADELPHIA-Angels flocked to the City of Brotherly Love last week for what was billed as a
first-of-its-kind meeting. The event was organized to foster increased networking among high net-worth individuals
from the Eastern Seaboard who invest small amounts of patient capital in promising start-up companies.
They are
part of an uniquely American tradition begun early this century as a precursor to the more formalized venture-capital
market, which didn’t begin to take shape until after World War II, said John May, chairman of the Private Investors
Network, Vienna, Va.
PIN is affiliated with The Baltimore-Washington Venture Group, a nonprofit membership
organization that is part of the Dingman Center for Entrepreneurship at the University of Maryland Business School,
College Park, Md.
“The private equity market is the place to go for capital,” May said.
“The
whole mid-Atlantic area is hot and growing and recycling its wealth.”
About 250,000 strong nationwide by
some estimates, the role of this informal angel corps has become more critical at the base of the business development
pyramid as the minimum size of venture-capital investments has grown in recent years. They invest a total of $15
billion to $30 billion in seed, start-up and early stage companies each year.
“Angels come in between the
friends-families-and-fools round of financing and the vulture-capital round,” May said.
“We are
spousal-like, and we discourage entrepreneurs who think this is a bank-like transaction.”
Ellen Sandles,
president of Sandles Capital Resources, a New York-based matchmaking service between angels and entrepreneurs,
said she organized the meeting to facilitate a more efficient process for investors to meet each other and to become
acquainted with promising new companies.
“This event today is a new approach whereby we have started to
get acquainted with all the angel investors,” said Lennart Haggard, chairman of the Pennsylvania Private
Investors Group, Philadelphia.
PPIG is administered by the Ben Franklin Technology Center of Southeastern
Pennsylvania and the University of Pennsylvania’s Wharton Small Business Development Center.
As part of the
agenda of the first “Angel Venture Forum,” 10 entrepreneurial companies seeking financing gave
presentations. Several are engaged in Internet-and telecommunications-related endeavors.
In the wireless telecom
segment, Datacom International Inc., Hatfield, Pa., offered an overview of its niche as a marketer and developer of
integrated circuits that combine flash memory and digital signal processors, a combination it said is
unique.
Datacom is seeking $500,000 to augment existing or promised alternative financing sources, said Sean T.
Marzola, president and chief executive officer.
“Perhaps (our) most compelling design win to date is with
Global Converging Technologies, (whose wireless private branch exchange) has a Windows CE front end, wireless
Web access and wireless telephone handsets. Each unit … contains 13 Datacom chips,” said a Datacom summary
presented to angel investors.
“(We) competed with Texas Instruments, Analog Devices, DSP Group and
Motorola (Inc.) for this business.”
