By far the No. 1 complaint I hear from startups is that there is a dearth of serious local investors. So when I received an invitation to an event called Meet The Angels, I wasn’t sure what to expect.
By sheer numbers, there were a lot of angels in the house. Eighteen angel groups participated in panel discussions and 565 people attended the event Wednesday night at a Boca Raton Embassy Suites ballroom put on by the Gold Coast Venture Capital Association. Most of the groups were from the tri-county area although a few were from Tampa and Orlando, including the Florida Angel Nexus, an investor in Miami-based startup Kairos. Some of the groups were not very active in terms of number of investments in South Florida companies.
“The whole idea of tonight’s event was to make it easier for entrepreneurs to come to one spot and meet all the relevant groups in the South Florida region and to meet some bona fide funds that actually do invest in early-stage growth companies,” said Bob Fitts, who heads the nonprofit GCVCA, whose mission is to connect entrepreneurs, service providers and investors in the tri-county region. He said about half of the audience were entrepreneurs, 30 percent were service providers and about 20 percent were investors, adding that “of course the entrepreneurs wish it was reversed.”
There was also a show of force Thursday night at Refresh Miami’s DemoDay that attracted more than 400 people to Miami Dade College in downtown Miami. Refresh Miami, South Florida’s largest tech-entrepreneurship group, meets monthly but holds this celebration of startups once a year. About 70 startups applied to present for prizes, but 10 got the spotlight — and the opportunity to pitch to the room of fellow startups, developers and a number of investors.
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When all was said and done, three startups split a cash prize of $1,300, $5,000 in legal services from Kevin Levy of Gunster, and about $4,000 worth of other services. Glip, a modern business messaging with built-in productivity tools, won first place; Waleteros, which enables underbanked and unbanked consumers to cash checks, pay bills, send money internationally and receive small loans using their mobile phones, took second; and Fish Indie, a subscription-based ad network designed to spotlight your Etsy products on your favorite blogs, took third.
Pitch events are one way to get an investor’s attention, but what about other ways? “Instead of a spray and pray to every group out there, do some research and try to get to one of the members who is particularly interested in your industry who can champion your startup and get in that way,” Juan Pablo Cappello of Accelerated Growth Partners advised at the Wednesday night event. AGP has made five South Florida investments in the last few months, he said, and AGP’s members are seeing interesting clusters forming around Latin America, logistics, healthcare and entertainment.
All the angel groups said they have seen improved deal flow and much better quality Florida companies in the past year. This is a change from discussions with some of them in previous years, where angels said quality deals in South Florida were hard to find.
At the earliest stages, Miami Innovation Fund has made five investments so far this year, all “somewhere north of $50,000.” Palm Beach Angels launched earlier this year to invest in Palm Beach County companies, and is interested in tech, products and the “Internet of things,” among other verticals.
Another new fund is Thesis Ventures, an institutional early stage investment group that typically invests $250,000 to $500,000. Mike O’Donnell, one of the partners, said Thesis is very hands on. If fact, it typically moves the portfolio companies into its riverfront offices in Fort Lauderdale. “We're 90 days old and have already made five investments,” he said.
Tamiami Angel Funds' newest fund has invested $1.5 million in five companies this year. Caerus Ventures likes the consumer space and typically will make investments of $250,000 to $1 million, and will do follow-ons. New World Angels does about five deals a year, as well as several follow-ons; $1 million to $7 million is the sweet spot. “I have been doing this for a number of years, and this is the deepest I have ever seen angel capital get,” commented Franc Nemanic of Crunchfire Ventures.
It is possible to get funded in Florida, said Brian Brackeen, founder of Kairos, who spoke to business leaders as part of a panel on the technology ecosystem put on by WorldCity on Friday morning in Coral Gables. He said Kairos, a facial recognition software solutions company in Miami, has raised $1.8 million to date, and $1.6 million of that was from Florida investors, including AGP members and New World Angels. Kairos is now pursuing a $10 million Series A round. Brackeen also presented some surprising Angelist registration data to the crowd: Florida has 2,056 startups and 7,903 investors while California has 18,091 startups and 8,859 investors, he said. The problem is many of those investors are still on the sidelines.
Fernando Cuscuela, co-founder of social media technology company Miami-based Everypost, has also raised significant funding locally. He was also on the WorldCity panel and said that coming from Argentina, he’s found growing a startup in Miami makes both fund-raising and accessing the U.S. market easier. Laura Maydón, managing director of Endeavor Miami, told the group that leaders are now focused on growing the funding networks as well as avenues for expanding and retaining technology talent in South Florida, another hot topic of the WorldCity event.
For entrepreneurs just getting started on fund-raising, the angels on Wednesday had plenty of advice. Execution is your single biggest differentiator. Know thyself, and mitigate your weaknesses by building a strong management team around you. Pursue your passion, and make sure you really, really love what you are doing. Never lose sight of the value proposition. Know what you don't know and be coachable.
At the early stages it is more about building strong strategic partnerships than determining valuation, said Joanna Schwartz of EarlyShares, a funding platform for accredited investors. “Don't get into business with jerks. You are going to be married to these people for a very long time,” added Zack Cherry of Caerus Ventures.
Follow Nancy Dahlberg on Twitter @ndahlberg.