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Ariel Angels Views and Issues

SUMMER 2014 --- Riding the Wave of Success

by Lesley Francis on 06/19/14


Ariel Southeast Angel Partners (ASAP) is in a very buoyant mood as we report our second exit within twelve months.  This time, one of our medical device investments, New Wave Surgical (NWS) which is based in Florida, has been acquired by Massachusetts based, international healthcare company, Covidien. 

The 50% of our members who chose to invest in New Wave Surgical in 2010 have made a significant return on their investments (the rest of us are kicking ourselves…).   ASAP screens and recommends on every deal but investment decisions are a matter for individual members on each occasion.

ASAP met the young but dynamic Alex Gomez four years ago when he told us his story and his big idea.  He had worked as a surgical technician at Broward Health Medical Center and had attended Cornell Medical College but in 2006 he decided to pursue the development of his simple but ingenious idea.   Alex had seen many laparoscopic surgeries performed over the years and noticed that camera lenses would continually fog and make clarity a significant issue for the surgeons.      

With a lot of hard work, dedication and investment from believers in him and his technology, NWS developed a simple device, which keeps surgical instruments warm and prevents the camera from fogging up during minimally invasive surgeries.                     

While the details of the financial terms of the Covidien deal were not disclosed, it is understood that NWS was acquired for a sum in excess of $115 million.  This classic entrepreneurial success story is great news and we are very pleased that after the purchase of an impressive sports car Alex intends to invest some of the fruits of his labor into other start-ups in the medical device arena.

And with the economy appearing to be heading into calmer waters, ASAP is confident of making another exit in the not too distant future so stay tuned.

Fall BLOG 2013

by Lesley Francis on 11/19/13

The Female Influence

Some members’ clubs of varying types are still bastions of male influence with the wife being granted access rights only on the arm of her husband and some clubs even ban the female spouse from accompanying their husband to important member meetings……..

 

This is clearly NOT the case with Ariel South East Angel Partners (ASAP) where female investors (with or without husbands) are very welcome.  It is true that we have a policy of allowing the spouse of a member full joint membership rights but this is a gender neutral policy.  It is also true that three of our board of nine managers are female and that we actively welcome any member willing to take on responsibilities within the group and participate in deals, regardless of gender.

 

A report earlier this year by Jeffrey Sohl from the Center for Venture Research at the University of New Hampshire revealed some interesting insights into the role of female investors in the angel investment world today:

 

·        The proportion of active women investors allocating funds doubled between 2011 and 2012 from 11percent  to 22 percent

·        Women-led angel groups like Golden Seeds and Seraph Capital are contributing to an increased number of women angel investors in the USA

·        Women, in line with all angel investors in recent years are investing heavily in software, healthcare (including medical devices and equipment as well as healthcare services) and biotechnology,

·        More women owned ventures are seeking angel capital than in previous years – up to 16 percent in 2012

·        There are more women than men in universities right now which is contributing to these trends

·        The report showed that when more than ten percent of the investors in an angel group are women, they increase the investment activity of the group

It will be interesting to see if next year’s report shows a further development of these trends. 

However, whatever your gender, ASAP is an interesting and potentially rewarding, member based route to investment opportunities.  If you would like to attend a meeting as our guest to find out more, please do not hesitate to contact us.

It's "ALL" About The Exit

by Lesley Francis on 09/26/13

                        

NEWS – SUMMER 2013

We are excited about our recent exit, the sale of our group’s investments in Advanced Liquid Logic (ALL), a North Carolina company specializing in “lab on a chip diagnostics” technology.  ASAP supported three investment rounds in 2007, 2008, and 2009.

 

 ALL is now a wholly owned subsidiary of Illumina Inc., a San Diego based, NASDAQ listed company with revenues in excess of $1 billion and over 2,500 employees.  Way to go Angels!

 

The beauty of our member-focused investment group is that we follow a network model.  This means we carefully screen deals and members then each decide individually to invest or not in each deal.  As many of us are NOT scientists, we relied on other members who first form a screening group and then a due diligence group that understand both the business and technical aspects of ALL’s business plan.  ALL sold to Illumina in order to further develop its innovative technology which “electrically segments and manipulates small droplets within a sealed disposable cartridge to perform complex laboratory test protocols on fluids such as blood, sewage, water, chemicals and solutions”.  ALL was attractive to Illumina for the development of their next generation gene sequencing. Not exactly eighth grade science!

So while every deal is different, what do the Ariel Southeast Angel Partners look for in their screening and due diligence processes before recommending to our members for voting and potential investment?  Important considerations include:

 

·        We often invest in early rounds for startups where the potential return is higher

·        Angels invest in people - i.e. the management team, and key players, and not just the concept or business strategies

·        ASAP is willing to lend guidance and expertise but is generally not involved   in the detailed overseeing of management teams and activities

·        Our rigorous due diligence process often provides great insights to the entrepreneur and allows them to return for follow on investment at a later time as their business model progresses

·        Angel investment groups can syndicate a deal where a VC group generally wants to take the whole deal portion;  we can ‘spread the risk’

It is true that there is a possibility for failure as with any investment – particularly in early stage businesses.  However our track record, even with the economic downtown of recent years, speaks for itself and we are eagerly awaiting the next exit from one of our other 18 portfolio companies as we screen the new kids on the block.

ASAP is not only interesting and potentially rewarding, but it’s a great way to meet movers and shakers in the Coastal Empire.  Contact us if you would like to hear more about membership!

Where Angels Fear to Tread

by Lesley Francis on 09/10/13






We have been called a “ragtag army”, “quasi-professional investment syndicates”, “Godsends” and a “pain in the butt” but one thing is for sure – Angel investing is here to stay. Bridging the ‘equity gap’ has always been a challenge for entrepreneurs. When they have exhausted funds from savings, friends and family, bank loans and credit cards but are not ready or right for venture capitalist funding then angel investing is often the way to go.




Looking at it from the perspective of entrepreneurs, there are some clear advantages and disadvantages to seeking angel investing which are often reported to us. The following summarizes comments Ariel Southeast Angel Partners have routinely received over the years of working with a range of start-up and early stage businesses:



THE PROS




• “You are a lot more flexible than most funding routes – we can get the smaller amounts of capital we need with reasonable business agreements and we don’t have to worry about high monthly payments and fees”




• “I came looking for money and I got real business expertise – your insights and experience have been an unexpected bonus for my business”


• “Because we did not have a solid track record of success yet, traditional funding routes would not touch us – you were prepared to dig beneath the surface, steer us and invest”


AND THE CONS………




• “You were great in the first round but when it came to follow on investments, it was much harder to raise the capital we needed”

• “I was hoping that we wouldn’t have to give away as much equity as we did to secure the investment”


• “I was surprised by the level of involvement you wanted to have with us going forward – I knew there would be a level of reporting – which is reasonable - but it took a bit of getting used to having one of ASAP on our board”


So, seeking Angel investing isn’t for every entrepreneur. ASAP, like many Angel groups, prides itself on the quality of our due-diligence processes. But remember, we position ourselves as partnering entrepreneurs, not acting as an ATM!