By Tom Ballard, Chief Alliance Officer, PYA
Two separate but fairly complementary initiatives are underway in East Tennessee to try to grow the number of angel investors to further spur investments in local start-ups.
As previously reported, one has a name; it is Chattanooga Cherubs (see recent teknovation.biz article here). The other in Knoxville (see teknovation.biz article here) is offered under the umbrella title of “Opportunities on the Horizon.” Both held their second sessions last week, and we were able to join the Knoxville group in-person and the Chattanooga effort virtually.
The approaches have both similarities and differences, but the goals are the same: increase the number of angels through better awareness of angel investing and education around the topic. As new Chattanooga resident Jay Shaffer said on Thursday about Chattanooga Cherubs, “We want to educate and become an on ramp.” He’s a long-time executive with Sun Microsystems, more recent serial entrepreneur, and member of the Atlanta Technology Angels
- CO.LAB Chief Executive Officer Lindsey Cox is coordinating the Chattanooga effort along with Shafer and Sahej Singh who leads business intelligence & strategy for Reliance Partners, one of the nation’s fastest growing commercial insurance agencies with a large presence in trucking and logistics.
- The Knoxville initiative is sponsored by the Knoxville Chamber, Knoxville Entrepreneur Center(KEC), and Innov865 Alliance. Like CO.LAB, KEC is part of the Launch Tennessee statewide network of entrepreneur centers. And, there is a specific driver for the Knoxville effort. Increasing the number of angel investors was a key recommendation included in the Chamber’s “Capital Access Redefined” report that was released in early August (see teknovation.biz article here).
- Both focused on the basics of angel investing in their first sessions. The Knoxville group’s title was “Angel Investing: What It Is.” In Chattanooga, it was titled “Angel Investing 101.”
- The Chattanooga group has planned for six sessions, then will decide where the initiative goes in the future. At least for now. the Knoxville plans stop after the third workshop in March that is focused on “Women in Angel Investing.”
- Both groups are focused on individuals who would meet the threshold to be classified as accredited investors, but last Thursday’s session of the Chattanooga Cherubs included a discussion of something called “Series 65” as a vehicle to becoming accredited. The Knoxville discussions have mostly focused on the income and net worth requirements. “Series 65” is one of three financial licenses – the others being “Series 7” (license for public securities brokers) and “Series 82” (license for private securities brokers) – that automatically qualify an individual to be considered as accredited, regardless of meeting the financial means threshold.
- The Chattanooga sessions are 60 minutes in length and scheduled for the lunch hour on the third Thursday of the month. In the case of Knoxville, they have been 90-minute sessions that started in the late afternoon.
- Both either have already involved investors and entrepreneurs on panels (Knoxville) or plan to do so (Chattanooga at its March and April events). In the case of last Tuesday’s session in Knoxville, there were two panels. One was a group of leaders of angel or venture firms – Scott Ewing of Appalachian Investors Alliance, John Morris of The Lighthouse Fund, Grady Vanderhoofven of Three Roots Capital; the other involved two entrepreneurs – Chad Seaver, then Co-Founder of Arkis Biosciences and Samer Saab, then Co-Founder of Wala – who had accepted angel investments. Charlie Brook, one of the Co-Founders of the Chattanooga Renaissance Fund, and Cam Doody, Co-Founder and General Partner at Brickyard and also Co-Founder of Bellhop, are scheduled for the March 17 Chattanooga Cherub program.
Last week’s Knoxville event continued the cogent advice that we summarized in our teknovation.biz article on article summarizing the January session.
- Morris reminded attendees of three options: find a company yourself and invest, join an angel group, or become part of an angel fund.
- “Angel investing is not a transactional arrangement in most cases,” Ewing said, adding the company in which an angel is investing “is bringing on a business partner.” Vanderhoofven elaborated with the point that it is not just dollars but other things like experience and an angel’s personal network
- Finally, Morris told those considering becoming an angel to not be fearful. “The more you know, the better you will be as an angel.” He also cautioned to not overstep an angel’s role. “Advising is one thing, instruction is another.”