Delta Angel Group could bridge gap for local entrepreneurs in Inland Northwest

Pro Pharmaceutical Inc. shares opened for trading on the American Stock Exchange Wednesday. The stock was worth $5.25 by day’s end. And a few Inland Northwest investors who belong to the Delta Angel Group http://www.deltaangelgroup.org were very happy.

Bert Caldwell
The Spokesman-Review

A year ago, they had the opportunity to buy those shares for $2.

If every company that has met with members since then does as well, Delta may have to limit enrollment, although the $1 million in assets required constitutes a pretty high barrier already.

With that kind of money, "angels" can afford to put money into high-risk investments. They might lose everything, or they might back a Pro Pharmaceutical.

Delta has been pairing investors with innovation since last October. The group was the brainchild of Kim Stearns, a marketing consultant, and Gary Paquin, a former officer at Medinex Systems Inc.

A non-transferable individual membership costs $300. Institutions pay $1,000. And you do have to be worth $1 million to join.

For their money, the investors get to hear from companies pre-screened by the group to assure they have a legitimate proposition. They also have access to company business plans on the member Web site, confidentiality, and the chance to network further among themselves.

Delta, Stearns says, invests nothing. Members do. "We’re simply matchmakers," she says.

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Delta Angel Group

Attn: Kim Stearns

721 Lochsa Suite 24

Post Falls, ID 83854

Idaho Phone:
208-699-2758

Washington Phone:
509-979-5308

Other inquiries:
[email protected]

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Entrepreneurs in this area have long lamented the lack of funding that could bridge the gap from family financing to venture capital. Delta could be that bridge.

Paquin says he and Stearns were told repeatedly that there was not enough monied people in the area to create such a resource, nor were there enough local companies with compelling business plans.

In fact, he says, there may be as many as 2,000 full- or part-time residents of the area with total assets of around $10 billion. Just a slice of that could fund hundreds of new companies.

And the companies are out there. "The amazing thing is the number of good investment opportunities in the area," Paquin says.

Pro Pharmaceuticals was an exception because the company calls Boston home. Paquin knew one of the principals.

But Wednesday, about 25 members heard from Verification Security Corp., which has developed the MagDot, an anti-counterfeiting technology. Fairchild Air Force Base imprints the dots on its security cards. They should be appropriate for everything from concert tickets to tax stamps.

Without angel money, says Verification President Doug Johnson, the company might have to seek public funding prematurely.

"This is just golden," he says of the opportunity to discuss Verification’s potential with Delta members.

GenPrime Inc. also pried some money from Delta investors, but got much more besides that funding, says Chief Executive Officer Jim Fleming.

Former Itron Corp. President Johnny Humphreys was among those who attended the February presentation, and he became a member of GenPrime’s board of directors. Klaus Huschke, also formerly of Itron, came on as a consultant on international sales.

"That was a real fringe benefit," says Fleming, who adds that a presentation to a Seattle angel group elicited more resumes and consultant inquiries than dollars.

There are fringe benefits for the community as well.

Norm Leatha sits on Delta’s board and coordinates the Hogan Entrepreneurial Program at Gonzaga University. Delta hires student interns to help screen companies that want to present to the group, he says.

The students get the chance to work with entrepreneurs, and the companies get exposed to bright potential employees.

For the area, the payoff could be more jobs provided by companies funded by Delta members. Paquin says that possibility exists even with Pro, which could need production facilities as it grows.

Stearns, Delta’s managing director, calls the approach "economic gardening" — communities growing their own businesses. The model has already grabbed the attention of other Northwest cities, she says.

She and Paquin will do a workshop for Lewiston-Moscow-Pullman officials next month. There has also been an inquiry from the Caldwell-Nampa area in southern Idaho. Expansion will strengthen the network and foster more economic growth, Stearns says.

The results could be golden for everybody.

Business columnist Bert Caldwell can be reached at (509) 459-5450 or by e-mail at [email protected]

http://www.spokesmanreview.com/news-story.asp?date=091403&ID=s1410188&cat=section.business