Editors' Forum | Angel investing pays success forward
Eight out of 115 seems like a small number, but as far as angel investing goes, that is like finding eight diamonds. Since starting in June 2014, First Jamaica (First AngelsJa) has notched eight ventures that are up and running, and while it is early days, the companies are performing well, according to chairman of First AngelsJa, Joseph M. Matalon.
Entrepreneurs either approach First AngelsJa members directly or via the network's website. At any rate, the process of accessing funding from members of the network begins with an application through the First AngelsJa website. Executive director Sandra Glasgow said the application is the beginning of a very robust screening process that leaves only serious entrepreneurs with a good idea or a business that can satisfy a need and is potentially scalable.
Matalon said that there is an involved process between a visit to the website and investment with deliberate steps along the way.
"Of the 327 applications, 115 were qualified, and from that, 30 of them actually pitched to the angel investors. Twenty-three of that 30 went through due diligence, and we finally ended up investing in eight and another two are under consideration," Matalon noted, adding that as an international benchmark, it is very good, compared to other networks operating in the USA, for instance.
To date, First AngelsJa members have invested nearly US$817,000 (about J$101 million). The network is pointing to the growth and innovation from companies such as DRT Communications that has become a preeminent media-monitoring agency using bespoke technology. Turner Innovations has managed to develop the only sorrel-harvesting machine in the world, with a patent pending. Others such as BookFusion have managed to attract international publishers to their platform, while Cirrus is proving to be a reliable global loan-management platform.
Post-investment action coaching and hand-holding is a requirement for all entrepreneurs. Glasgow said there is a new attitude on the part of entrepreneurs that augurs well for the development of the venture capital ecosystem.
"The willingness of entrepreneurs to bring people into their company is a big deal. It is a big change that has only occurred in the last few years," Glasgow said.
She notes that the formula for success at First AngelsJa includes more than the careful screening of entrepreneurs in need of funding. She said it starts with the people who are part of the First AngelsJa Network.
"We are very careful about the persons we invite to join this network. One bad apple can spoil the whole bunch. We want persons who are committed and supportive. They must be people who give of their time and be willing to not only put their money at risk but even their reputation," Glasgow said.