Angels Among Us
Tim Cartwright, chair of Naples-based Gulf Coast Venture Forum since 2004, saw enough investor and entrepreneurial potential in Sarasota that he established a chapter of his angel investor club here last fall. Within six months, it attracted 21 members. By day, Cartwright is a director and partner with Fifth Avenue Advisors in Naples, a middle market merger and acquisitions consultancy that helps entrepreneurs who are ready to sell their companies develop exit strategies.
How does the Gulf Coast Venture Forum convene investors and entrepreneurs? In October, we have a kick-off meeting that’s open to the public. The rest of the meetings are open to members who qualify as accredited investors as defined by the SEC, with $1 million in net worth or $200,000 in adjusted gross income over the past two years and the same expectation this year. With a private business, you don’t have all the public disclosures of a public securities sale, so investors may not get the full story. They may not understand the risks or how illiquid the private stock can be. If you do a private sale as a private company, you must only approach people who are accredited investors. It’s very high risk.
Florida is not known as a hotbed for venture capital. Are there enough deals here? We’ve had a successful chapter in Naples that would prove naysayers wrong. We look at deal flow across the country, but 75 percent of it comes from Florida. This season, we will have looked at 291 deals. Not all 291 get to present. We hear from two or three per meeting, so you get between 12 and 18 companies that get a shot at presenting before 80 members in Naples and 21 members in Sarasota.
Why does Florida’s venture capital investment lag so far behind other states? We just don’t have that many later-stage companies. We rank 17th in the country in venture funds that are invested in the state. Since the 2000 dot-com bubble burst, venture capitalists do not invest in early-stage companies. Because the capital formation environment in Southwest Florida is so abysmal, we just don’t connect enough early-stage companies to investors.
What are the opportunities here? Software and high-tech. Medical software, medical devices and life sciences are all of interest to local investors. Rob Campbell of Voalté presented. They are poised to succeed and bring a lot of attention to Sarasota. All you need are a couple of those companies to succeed and you’ll start gaining attention. The Ringling College could become a hotbed for entrepreneurship. I’ve been in to talk to Dr. [Larry] Thompson [president of Ringling College], and he’s very supportive of creating a more active angel community. He’s turning out some of the brightest minds, and one of these days, one of these kids is going to start a company in Sarasota.
How much do companies ask for? Companies ask for $200,000 to $75 million. The average capital raise is $1 million. One company, Advanced Infrastructure Technologies of Bonita Springs, is commercializing a Department of Defense technology called Bridges in a Backpack. It’s a carbon fiber sleeve, and when you inflate it and add a resin, it creates a very hard exoskeleton that you bend into a radius and fill with concrete. These half-circle tubes of concrete can span a waterway or gulley or a bay without any steel. A bridge of 20 to 75 feet can be put up in a matter of days. That company was successful in completing its $2 million raise with help from our members.
Learn more about the Gulf Coast Venture Forum at gcvf.com or call (239) 262-6300. The investors will meet again in September, and the next open meeting is in October, but entrepreneurs can submit business plans year-round.