News

Who’s in charge: Dee Harris runs Arizona ‘angel’ network

The sign on Dee Harris’ door ought to say, "Angels wanted."

Harris knows that a lot of wealthy investors saw their portfolios shrink over the past few years. But the economy is improving, and with the boom of new residents and new wealth in areas such as north Scottsdale, he figures the time is right for angel investors to dip their toes into Arizona deals.

Jane Larson
The Arizona Republic

http://www.azcentral.com/arizonarepublic/business/articles/0920whoseincharge20.html

"I’m hoping as the economy and the quality of deals swing up, we’ll see more investments," said Harris, who acts as managing director of the Arizona Angels Investor Network.

*************

A look at the Arizona Angels Investor Network.

What it is: A group of accredited investors who become involved primarily in Arizona-based early-stage and developing-growth companies.

Managing director: Dee Harris, senior managing director and chief operating officer of Carmichael and Co. LLC in Phoenix.

Information: http://www.azangels.org or (602) 508-6088.

*************

Harris’ full-time job is senior managing director at Carmichael and Co. LLC, a boutique investment banking firm based in Phoenix. A former head of the Arizona Corporation Commission’s securities division, he also knows how to run the investment game right.

Angels take their name from a term used for the wealthy individuals who used to help finance Broadway shows. Nowadays, they are better known for putting part of their personal money into promising young companies.

They’re a vital part of the entrepreneurial process, and risk-takers among them are eager to find companies to invest in. But often they like to stay under the radar and don’t openly solicit companies.

"With angels, it is word of mouth," Harris said. "Members invite their friends."

Formal networks of angels are a relatively new phenomenon. The Arizona Angels first formed in 1999, followed in 2000 by the Tucson-based Desert Angels.

Since Harris took over two years ago, the Phoenix group has fine-tuned its process. It works like this:

Companies seeking $100,000 to $600,000 in angel financing submit executive summaries to Harris through the network’s Web site. He’s getting about one proposal a day now, weeds out the ones from other parts of the world, and takes about half the ones he scrutinizes to a selection committee.

Mike Wolf, a local angel and veteran of the Valley’s software industry, and local venture capitalists Bob Pothier and Sherman Chu then decide which firms to put before the group. Members of the Enterprise Network, a group aimed at supporting entrepreneurs, help the companies hone their 10-minute pitches.

The Arizona Angels number about 25 now, people Harris knows are willing and able to write checks of $50,000 to $100,000 each. He gathers the angels together every month, except in summer, for lunch and presentations by two or three companies.

If a company piques angels’ interest, they will form a group to conduct due diligence. After that could come an investment, contacts and other involvement in the company.

Harris is working to expand and strengthen the group. He’s working with angel networks that are trying to form in Payson and Flagstaff.

And he is going to San Francisco in November for the Western regional meeting of the Angel Capital Association to discuss the idea of taking Arizona companies on the road and encouraging investment from multiple angel networks.

And he offers tips like these to would-be recipients of angel financing:

• Don’t get bogged down in an endless discussion of the technology. Investors are interested in the business, the market size and the experience of the management team.

• Have an exit strategy. Think of likely acquirers of your company in three to seven years.

• Once you get an investment, keep them informed. "No surprises" is the rule.

Reach the reporter at (602) 444-8280.

Sorry, we couldn't find any posts. Please try a different search.

Leave a Comment

You must be logged in to post a comment.