Startups are not only for Silicon Valley, according to the Westchester Angels. Jeff Loehr, Sandy Wollman and Jonathan Rosen, businessmen with a range of experience, founded the Westchester Angels to mentor and invest in companies close to home.
Loehr, who has worked in IT and consulting internationally, said when he started investing in companies, the process involved hours of travel. He realized there were companies in Westchester he wanted to fund, but there was no angel group.
Last year he, Wollman and Rosen created Westchester Angels, a group of accredited investors who find and vet startups for potential investments. Angel investment typically comes after a startup has raised money from friends and family, but before it seeks venture capitalist funding, Loehr said.
Westchester is an ideal location for startups because of the close proximity to the city with a lower cost, opportunity for benefits and access to skilled labor, he said. Loehr sees growth in technology in general and more specifically in biotechnology and financial technology and in food and consumer products.
“We think there’s a nascent startup scene here – we think there are enough potential investors, there’s enough potential interest,” Loehr said. “We’ve come across a lot of great entrepreneurs who are working and starting up businesses here in the Westchester area.”
Rosen said they are interested in businesses based in Westchester and southern Connecticut because the angels can be more involved if they can easily meet with the entrepreneurs. Wollman said the goal is not only to write checks, but to mentor startups.
“We’re finding that the angel investment community as a whole is a very collaborative community,” he said. “People are willing to share their toys and advice in the sandbox, if you will, and we’re trying to add that value back. This is the culture that we’re trying to create – we’re serious about investing, but we want to add value for entrepreneurs wherever we possibly can.”
The group has about 15 investors and seeks more. Investors need to comply with the Securities and Exchange Commission’s requirements, some of which include having an earned income of at least $200,000 for the past two years or having a net worth of more than $1 million. Entry into Westchester Angels costs $750 per year, which entitles investors to come to meetings and hear presentations from fundable, scalable startups, Rosen said.
Entrepreneurs have to have risked their time and money and have raised a round of “friends and family money,” according to Rosen. The group also looks for companies that have proof of concept and a strong management team. The angels will invite vetted companies with promise to pitch their businesses live.
If investors are interested, they move to the “due diligence” phase, which involves thoroughly investigating financials, talking to customers and raising other questions to reduce risk. Now, angels invest individually, but they could have a pool of funding in the future, Rosen said.
He said the founders’ diverse backgrounds bring different skill sets to the group. Rosen practiced law at his own firm, ran a high-end furniture business with his father, worked at a Westchester-based contracting company and in between, founded two startups. Now he is managing partner of Collaberex, lead-generation groups for business to business.
Loehr has worked for companies such as Rio Tinto and Daimler AG in Berlin and has advised large and small-scale companies. Now he is a partner at his consulting firm, stratalis.
Wollman worked internationally as the co-partner of a textile supplier, was a financial planner and the director of pro bono at the Financial Planning Association. He started the Small Business Advisory Alliance, which offers free mentorship for emerging or existing business owners. It is now merging with ICanNY, a Hudson Valley-based incubator and accelerator.
“We’re in a unique position with the Westchester Angels to bring it all together,” Wollman said. “I’m excited about the future of the Westchester Angels to really make a difference and to create that entrepreneurial spirit here in Westchester that needs to be created.”
Sidebar: Are you looking for angel money? Join Westfair Communications and the Westchester Angels at our own “Shark Tank” event in April. To find more information or to submit your startup for review to pitch at this event, visit westfaironline.com/events.