By Tom Ballard, Chief Alliance Officer, PYA
The last year has been a busy, but fulfilling one for Eric Dobson and the team he leads at Angel Capital Group (ACG), one of the largest angel networks in the country.
In February 2015, Dobson, ACG’s Chief Executive Officer, and Steve Mercil, his counterpart at Minnesota-based RAIN Source Capital, announced they were combining their businesses.
Then, some 10 months later, ACG announced in November that it had led an $8.7 million Series A round for at General Graphene. It was the largest Series A investment ever made in a Knoxville area company and one of the largest in the Southeast.
The connection between the two should not be lost on Knoxvillians. As ACG grows and shows new muscle like the General Graphene deal, it contributes to the emergence of the region as a technology and entrepreneurial hotspot.
“This region has come a long way in the last four years,” Dobson says. “We’ll mark the TNInvestco program as a significant event.”
He notes that every TNInvestco has raised another fund, a fact that many predicted would be the result of the program.
“Tennessee is going to stand out in the next 18 months as investment capital tightens,” Dobson observes.
In terms of deals ACG is seeing, he says both the number and quality have increased dramatically.
“The fact that new funds are forming in the region is positive, but you also need entrepreneurs,” Dobson reminds us. For those who may not know, Dobson was an entrepreneur who started several companies before joining ACG.
As far as the combining of RAIN Source Capital and ACG, he says it is taking longer than he expected, yet there are some really positive results of the decision made a year ago.
“We’re getting tremendous inbound interest from cities all over the country interested in establishing new funds,” Dobson says. “We have investors in 10 cities and expect to double that by the end of 2016.”
ACG will probably add a fourth partner soon. This individual will join Dobson, Mercil and Scott Ewing.
“I’m concerned about the darlings in our portfolio,” Dobson says, referring to the start-ups that ACG has funded and their need for follow-on capital as the expected “Series A crunch” hits.
He says that “many throughout the industry are concerned it is going to be much harder this year for companies to get late Series A and Series B deals done. So, we are targeting building relationships and funds to get them (those in the ACG portfolio) through the coming desert.”
“We’ll probably start a next level venture-type fund,” Dobson notes. The working title is the “Regional Leadership Fund.” It could be for Series A or B investments. Meanwhile, as previously noted in this teknovation.biz article, Dobson is leading an effort to raise a fund to support the companies participating in the Knoxville Entrepreneur Center’s “The Works” accelerator.