Rhys L. Williams is the president of the New World Angels, which he co-founded in December of 2003. Since 2005, the group of 35 accredited investors has made nine investments in South Florida-based companies, mainly in the tech space. Investments of $500,000 are made in financing rounds that generally total between $500,000 and $3 million. The fund also has made nine follow-on investments in some of those companies.
Here’s Williams’ perspective on angel investing.
Q: What do you look for in companies you invest in?
A. We look for:
• Entrepreneur or management team with deep domain expertise and experience. Successful track record a big plus.
• Reasonable valuation; our investment sweet-spot is for those ventures which value themselves between $2 million and $7 million prior to our investment (“pre-money”), though we will look at firms up to $20 million valuation. We are comfortable with pre-revenue companies, though revenues are always a big plus.
• Modest capital requirements, with no more than one or two subsequent rounds of financing as a desired objective.
• Favorable competitive positioning, meaning the product or service is meaningfully differentiated from its competitors.
• Defensible barriers to entry a plus, which could be a favorable patent estate, or a key, proprietary supplier or distribution partnership, among others.
• Broad, expanding market space, capable of supporting at the end game at least one big winner and two other runners-up. This translates into multiple exit opportunities for the angel-backed company.
• Solid sales and marketing plan, this tending to be the area least understood or most neglected by the entrepreneur.
• Entrepreneurs and prior investors who work well in teams, that are willing to view the New World Angels as partners in their success, able to listen to and process strategic advice, etc.
Q. Can you give me some examples of a couple of companies you've invested in recently?
A. Late in 2011 we invested in Aplicor Inc., a Boca Raton-based company whose Cloud Suite product offers small and mid-sized companies a true cloud business solution. It integrates customer relationship management (CRM), sales force automation (SFA), customer support, marketing automation, and financial reporting, all within a single web-based, dashboard-rendered solution. The Cloud Suite is easier to use and deploy, more flexible, and most often a better value than larger competitors’ offerings (vs. Salesforce.com & NetSuite) and is winning in head-to-head customer competitions. Tech giant Don McKinney is the Chairman and early angel investor who brought this deal to us, and the company is also ably-coached at the Board level by founding Citrix CEO Roger Roberts & Wayne Huizenga, Jr. CEO Steve Haley and his team are doing an incredible job of doubling accounts every quarter.
In early 2011 we closed an investment in Citrix Co-Founder Ed Iacobucci’s latest venture. VirtualWorks tackles the challenge of “data sprawl” by introducing a new enterprise information architecture, making an enterprise’s information instantly and securely accessible — regardless of what it is, where it lives, or who needs it — through affordable, pre-integrated packaged software. Mr. Iacobucci’s vision and drive are absolutely unmatched in the tech realm; we are very excited about this deal.
The rest of our portfolio includes investments in telemedicine, mobile/web applications, biotechnology (therapeutics), business services, and consumer products (pre-packaged foods).
Read the full interview with Williams here at The Starting Gate blog on miamiherald.com/business.
A primer on equity crowdfunding
EarlyShares’ CEO Maurice Lopes offers the lowdown about equity crowdfunding, which was legalized as part of the JOBS Act signed last year in washington. The rules are being shaped by regulators now, and equity crowdfunding is expected to roll out next year. EarlyShares has already started taking applications for its platform. Read what Lopes had to say at CrowdCamp last week in a post on The Starting Gate here, as well as read more news, views and tools for entrepreneurs on the blog miamiherald.typepad.com/the-starting-gate.