Proposals increase to MU-based equity group

Shahbaz Shahbazi News

Organizer cites pent-up demand, improving economy

BY MICHAEL MUCKIAN

The Golden Angels Network, a consortium of alumni and friends of Marquette University who invest in early-stage enterprises, is seeing an increase in the number of local firms seeking venture capital funding.

Network members have reviewed proposals from 20 firms seeking start-up financing already this year, said Tim Keane, Golden Angels’ director and entrepreneur-in-residence for Marquette’s Kohler Center for Entrepreneurship. Golden Angels members considered only 12 firms during 2003, he said. He attributes the uptick to the improving economy and pent-up demand.

“The deal-flow has increased and the pace is picking up,” said Keane. Companies under Golden Angels’ consideration include software manufacturers, a biopharmaceutical firm, a hydroponic gardener and engineer who’s developed new military and civilian applications for digital sound technology, said Keane.

ProcessArc, a Milwaukee consulting firm that adapts Six Sigma and lean manufacturing quality standards to financial services firms, is one company under funding consideration, said Keane, who declined to disclose the identities of other applicants.

To date, no investments have been made this year by the network of private equity investors, Keane said. In 2003, the network invested $1.5 million in startup firms. Keane declined to disclose the number of companies in which the network invested. Hundreds of funding requests have poured in since Golden Angels was founded in October 2002, but the investor network generally considers just two to three companies per quarter, said Keane. This year, the network has increased that number to accommodate growth in the number of qualified applicants, he said.

“Not all the companies we see are fundable, but there are more good applicants than we can afford to fund right now,” said Keane.

The Golden Angels Network currently consists of about 80 individual investors, he said.

Most firms require between $250,000 and $750,000 in seed capital and network members likely will invest between $10 million and $15 million per year, said Keane. The network only funds companies from southeastern Wisconsin, he said.

INVESTOR INVOLVEMENT

Lack of business acumen often keeps entrepreneurs from receiving funding from the Golden Angels and other seed capital sources, said Keane. Investors willing to get personally involved with new firms and help make them successful — often a part of seed capital development — are also in short supply, he said.

© 2004 American City Business Journals Inc.