Calling all investors
It was like a live version of TV”™s business reality show “Shark Tank” as 13 entrepreneurs from the Hudson Valley to Stowe, Vt., gave a one-minute pitch to a panel of angel investors, venture capitalists and equity providers.
The forum, arranged by the Hudson Valley Economic Development Corp. and Orange County Capital Investment Corp., brought Upstate Venture Association of New York to Newburgh”™s Hilton Garden Inn last week.
Kevin Halpin, president of Mayfield-based UVANY, said private equity firms such as his treat the businesses taken under its wing as its own.
“Essentially, they are ours. But unlike a marriage, it is not a permanent commitment. We are there to get the company to a place where they are viable, monetize our investment and get out.”
John Galanti, founder and CEO of DataNet Communications Group in New Windsor and primary angel investor for the company, spoke about the challenges he and fellow members of Orange County Capital face when taking on the role of “angel” for entrepreneurial hopefuls.
“Angel investing is the earliest piece of the private equity chain,” Galanti said. While the term “angel” may have a pious sound to it, “We are not altruistic. We are a group of high net-worth individuals who will put time and money into an opportunity. In many cases, the potential company is at its beginning stages.” What attracts angel investors to hopefuls the most, said Galanti, is the motivation displayed by the start-up, convinced it has the next “can”™t live without” product or company.
“We”™re looking for innovation and it does not necessarily have to be high-tech. It”™s not always about splitting the atom,” he said. “Brick and mortar companies need to have what we call the ”˜three M”™s”™ ”“ Management: can we get along? Market: is there one for the product? and Monetization: we do like to get our money back.”
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Once angel capital is invested, entrepreneurs can move up and make presentations to a range of investment companies, from venture capitalists to private equity groups.
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Other panelists in addition to Galanti and Halpin, who is director of DeltaPoint Capital Management L.L.C. (private equity), based in Rochester, were: Brian Model, managing director for Stonehenge Growth Capital (venture capital), with 10 offices nationwide; Michael Lasch, managing partner, Pine Street Capital Partners (mezzanine capital), based in Albany; and moderator Sam Ticknor, vice president of Corporate Fuel Advisors L.L.C., based in New York City (middle market investment).
Capital providers were also in the audience, including NYSTAR, Patriot Capital, Wells Fargo Capital and banks involved with funding potential entrepreneurial endeavors: New York Federal Credit Union, TDBank and Provident Bank.
Among the 13 companies seeking funding for their projects, seven were from the mid-Hudson region, “and they all appeared to have great potential,” said Ticknor after the presentations. “This is our first time in the Hudson Valley … and we were significantly impressed with the high level of entrepreneurs looking for capital.”
The recession has taken a toll on available money, said Ticknor. “Corporate Fuel Advisors made one investment in 2009, a biotech company based in Philadelphia. The current financial crisis has made us all more cautious. In addition to the company we took on last year, we are also working with three other companies navigating them through the recession….but there is money out there ”“ whether times are good or bad ”“ but in bad times, those who have capital to lend are going to tread cautiously and make sure their investments are solid.”
March Gallagher, deputy director of development for Ulster County, said she was thrilled that five of the companies presenting at the forum were from her area. “We are very fortunate that Orange County Capital and Hudson Valley Economic Development Corp. brought this panel together…it also showed us Orange is crossing county lines to bring the region together; it”™s important for all the counties in the mid-Hudson to work cooperatively.”
Scott Lask, principal of Wealth Management Group in Monroe, was thrilled with the presentations and the opportunity for investors. “Eventually, I hope to take my company to the next level and become an investor myself. This was a great learning experience and good to see there is so much talent here.”
For Tom Kacandes, director of business development for Prism Solar Technologies in Highland, it was “great to meet with investors who came from across the state to learn about potential investment opportunities in the region.”
All will have another opportunity to meet with the investors gathered for the forum. “We definitely liked what we saw and heard,” said Ticknor. “We”™ll be back. There”™s a wealth of opportunity here in the Hudson Valley.”