Boise: The newest city of ‘Angels’ – Investors help entrepreneurs get off their feet

ZoMag president and CEO Lorenzo Vallone talks about his technology outsourcing business as he prepares for Boise’s first “angel investor” network meeting Thursday. It was the first time angel investors in the Treasure Valley got together as a group to potentially pool resources and help area entrepreneurs.

Julie Howard
The Idaho Statesman

http://www.idahostatesman.com/apps/pbcs.dll/article?AID=/20040626/NEWS02/406260308

The Treasure Valley’s first angel investor network launched successfully this week with its inaugural meeting in Boise.

The network is expected to make it easier for start-up businesses to link up with high net-worth individuals, called "angel" investors, interested in helping entrepreneurs.

The Boise Angel Alliance http://www.boiseangelalliance.co drew about 50 investors to its first session to learn more about three start-up companies in Idaho. The meeting, cloaked in secrecy to protect the identities of high net-worth individuals, was closed to the media and to the general public.

"It was very well received," said Mary Givens, a specialist in the state’s Office of Science & Technology and a member of the group that organized the event. "We expected that there would be quarterly meetings, but we’ve already scheduled a second one for August."

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Boise Angel Alliance

Mail: P.O. Box 1845, Boise, ID 83701-1845
Phone: (208) 489-2147
Web: http://www.boiseangelalliance.com

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To participate, investors have to qualify as accredited under rules set out by the Securities and Exchange Commission. That means they had to have a net worth of more than $1 million, assets of more than $5 million, or an annual income of more than $200,000.

Individual investors such as J.R. Simplot have been credited with providing funding for Micron Technology, which has grown to employ more than 9,500 workers in the Treasure Valley. Angel funds have also been used in 90 percent of Inc. Magazine’s Fastest Growing Companies each year, and several local start-ups have funded operations through angel investments.

Phil Reed, a partner with Highway 12 Ventures, was part of the organizing committee and said early-stage companies are of less interest to venture capital firms and a better fit with individual investors.

"We’ve probably seen 200 deals that would qualify for potential angel funds," said Reed, explaining that venture capital firms typically fund companies that already have a product developed and a management team in place.

Reed said having an angel network in the region will allow his firm to refer companies too early in development for Highway 12’s interest onward for angel funding.

While the Boise Angel Alliance was formed through the efforts of the state Office of Science & Technology and the venture capital committee of the Boise Metro Economic Development Council, the intent is for the angels to ultimately run the network themselves.

The group already has a screening committee that views business plans of companies hoping to present to the network. The best are given 10 minutes to make a presentation at the angel meeting, with another five minutes to answer questions. After that, it’s up to the individual investors to contact the companies privately if they’re interested in investing, said Givens.

"Angel funding is happening today — we’re just trying to make the process more effective," said Steve Simpson, former CEO of Extended Systems, an occasional angel investor and a member of the Boise Angel Alliance. "Most cities of any size have angel groups."

John Shovic, president and CEO of Blue Water Technologies, traveled from Coeur d’Alene to present his company to the new alliance.

"It’s all about getting in front of the right people at the right time," said Shovic, whose company does water purification. "I don’t mind coming to Boise for this — it’s only an hour flight away."

Givens plans to help other regions in Idaho get their own angel networks started.

When entrepreneurs have more options for funding, more businesses are likely to start and succeed, said Karl Tueller, director of the state Office of Science & Technology.

"This needs to be duplicated in places like Sun Valley and Idaho Falls," said Tueller, adding those regions have already expressed interest in starting groups.