Crain's: Stark angel group ready to invest

After more than three years getting off the ground, Impact Angel Fund, an investment group designed to help technology-based startups in Stark County and surrounding areas, is ready to take flight.Chairman Jon Elsasser said the 34-member fund is finalizing due diligence on two technology ventures and hopes to dole out the first chunk of its $1.8 million pot this quarter.“Hopefully [we make] another one in the second quarter,” said Elsasser, a former Timken Co. executive. “We think with the size of our fund, we will be able to invest in about five companies. … Our objective would be to get those invested in the next two years.”It has been a less-than-smooth takeoff.After Impact had failed twice to secure a grant from the Ohio Third Frontier economic development program, Third Frontier in June 2014 awarded the investment group a loan of up to $1 million, which would match the anticipated $1 million investment on the part of its members. The actual terms of the loan, however, did not arrive until early in 2015. And, Elsasser said, “they were quite unattractive.”“We and all the other award-winning angel funds got together, and we went back and worked with the state to come up with a set of terms that was satisfactory with us and our investors, as well as to them.”When all was said and done, the delay meant that Impact did not finalize placements with its own members until late summer. The fund sold 36 units, raising $900,000, which – as it makes investments – will be matched by the Third Frontier loan.Since then, Impact has been meeting formally as a fund and heard presentations from three companies during the second half of 2015. Another five to six companies, Elsasser said, are on the fund’s radar for future meetings.“We will be looking at them this year,” he said, adding that Impact’s screening committee meets the third Thursday of every month at Stark State College. Among the current investment hopefuls are a cybersecurity company, two startups with wastewater treatment technologies, a health care technology venture and a battery storage firm. Impact is also eyeing two startups in the biomedical space. The fund will consider early-stage companies anywhere in Ohio, although it prefers those in Northeast Ohio. It’s even better if they are in the central to southern portions of the region. Along with making money, Elsasser noted, one of the goals of Impact is to “grow some new businesses in our backyard.”Momentum in the next 18 months will help determine the likelihood of an Impact II, which is something Elsasser, as an investor himself, would like to see to diversify the fund’s portfolio. The 10,000-feet view of a successful fund (or funds), however, would be disproving naysayers who doubted Stark County communities or their neighbors had much to offer, according to Steve Paquette, president and CEO of the Stark Development Board. “We feel like between the Akron-Canton area and companies like Timken and Goodyear and others, there are a lot of entrepreneurs sitting here, probably working out of their houses,” Paquette said. “Our aim is to prove it can be successful and to continue to go after financing for new ventures down the road.”

Crain's: Stark angel group ready to invest
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