Innovation Works builds network of angel investors

In its latest attempt to find more money for local technology firms, the state-funded Innovation Works is putting new emphasis on an
old network of wealthy, Pittsburgh-area investors who want to spend their money on local companies.

By:
Dan Fitzpatrick
Pittsburgh Post Gazette
Pittsburgh, PA
http://www.post-gazette.com

The network, now called the Southwest Pennsylvania Angel Network, is a collection of 250 people, many of whom have a net worth of
$1 million or an annual salary of at least $250,000. Some 50 to 75 of these people will attend a Nov. 13 dinner at the Duquesne Club,
where two local start-up companies will make 20-minute presentations.

Innovation Works plans to repeat the dinner-style presentations with different companies four times a year, and if the interest in these
companies is high, the nonprofit Hazelwood-based agency also may be able to bring in money from a list of 10 to 12 other "angel"
organizations around the state.

Kevin Lynch, who is leading the Innovation Works effort, expects that the local initiative partnering with others in the state will create a
network of some 700 angel investors in Pennsylvania.

"I think this is going to get a lot of play with a lot of players in the area," Matthew Hutchison, Innovation Works’ spokesman, said.

In many ways, Innovation Works’ new effort is similar in concept to one already in place at Equity Catalyst, a Squirrel Hill-based "angel
network" that hosts as many as five meetings a year with local investors, giving them time with a young, promising company in need of
money.

Its next meeting is Nov. 7, in the offices of the Pittsburgh Technology Council.

A for-profit outfit formed in 1999, Equity has raised more than $12 million from wealthy investors in the last three years. That money
has gone to six companies. Also, it was Equity Catalyst’s Tom Canfield who helped build the network of investors now being used by
Innovation Works, according to Equity Catalyst principal Chester Fisher, who said that when Canfield left Innovation Works’
predecessor organization to form Equity Catalyst, he drew from the same list of contacts to build Equity Catalyst’s network of 450 to
500 investors. "There are not that many people who would be on one list and not another," Fisher said.

But Fisher said he welcomed Innovation Works’ effort.

"We say the more the merrier."

Steve Robinson, a Squirrel Hill investor who is part of Innovation Works’ and Equity Catalyst’s networks, said the downturn in the
economy was making it more difficult for "angel" investors to part with their money.

"With that said, there is still a lot of money out there. What both groups are trying to do is tap into individuals who have not previously
made that kind of investment."

"There is just an awfully lot of money in this town."