Angel group seeks investors

TRAVERSE CITY – Starting a new business takes time and money-sometimes a lot of money. The goal of a new non-profit organization in Traverse City is to help start-up companies succeed by providing investment capital, strategic advice, and mentoring.

Traverse Angels is an early stage angel investment network. The invitation-only network targets local investors seeking to expand the economic base of the greater Traverse City region.

"Traverse City has a great entrepreneurial spirit," says founder Robert Ochtel. "It is an affluent area, and a great place to start a business."

The Traverse City Chamber of Commerce estimates that last year it counseled more than 400 clients interested in opening a business or improving an existing one.

"We are very supportive of the Traverse Angel network," said Tino Briethaupt, senior vice president of economic development at the Traverse City Area Chamber of Commerce. "There is an opportunity and need for an angel group in Traverse City. We will help them in any way we can with infrastructure and identifying entrepreneurial opportunities. We will help screen for good investment deals with a good rate of return on investment."

Traverse Angels is one of four angel groups in Michigan. The others are in Kalamazoo, Grand Rapids, and Bloomfield Hills.

An "angel" group" is different than a typical venture capitalist group, according to The National Angel Group. Instead of managing a pool of other people's investments, angels provide their own money to start-up companies. There are 265 angel groups in the U.S. and Canada, the group said.

Traverse Angels hopes to begin working with companies by early next year. Initially the network plans to work with about 35 to 50 investors with a minimum commitment of $50K to $100K.

"There is always a risk when investing in a company," says Ochtel. "Our investors will only accept good deals, not any deal."

The network is looking for start-up companies that need between $500K to $1.5 million in total capital. Some of the criteria for potential businesses include: a market opportunity to create at least $50M to $100M in annual revenue, a strong management team with relevant experience, and a company that will generate revenue within one year of funding.

Ochtel will be working closely with Traverse City lawyer Enrico Schaefer to secure investors and potential businesses.

"Companies come to me with a great product, but are in need of financial backing," says Schaefer. "Traverse City is a business community that has been looking for something like this for a long time."

Traverse Angels will also offer strategic advice and mentoring on how to become a successful company.

Ochtel has raised more than $50 million in venture capital and corporate and private equity from firms including Sequoia Capital, AT&T Ventures, and Intel Corporation. In addition to Traverse Angels, he is also exploring opportunities for an angel network in Battle Creek.

According to the University of New Hampshire's Center for Venture Research, 51,000 entrepreneurs nationwide received help from "angels" last year. Most received between $300,000 and several millions dollars in start-up money. Nationwide, health care service and software companies were the most popular with angel groups. Biotech companies and electronics ventures followed closely behind.

Learn more about Traverse Angels at the 2007 Business & Technology Expo Nov. 6 at the Grand Traverse Resort and Spa, Booth #T153. Traverse Angels will also be providing an "Angel Investor Overview" seminar at 3:30 p.m. at the Grand Traverse Resort.

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