New investor group TC
Angels puts 30 heads
together to weigh prospects
Each month since May the members of TC Angels have meet to screen companies that want money.
“We reviewed 10 companies the first month, eight companies the next month. Then we narrow them down to at most two. The CEO comes in and speaks to us,” says John Alexander. He’s chairman of the new Twin Cities Angels, a group of angel investors with 30 members.
Each puts in $50,000, and there’s $1.5 million in the fund. Each has one vote, Members can make individual investments as well, in what are known as side-by-side arrangements.
“It’s a lot of work to do it well,” he says about investing. “We always do better when we have a lot of smart people in the room.”
Alexander was at St. Jude Medical until 1996, and since then has helped many local companies develop through a consulting firm.
He started researching angel groups, and found there’s a national association for them, with 90-some members, but none was in the Midwest. “Models run everywhere from dinner clubs to groups that hire someone to do your deals,” he says.
He says all members joined because they want to make better investment decisions. “The surprisingly big reason is everybody wants Minnesota to become the high-tech mecca that everybody thinks it was.”
He says the group focuses on any areas where member have expertise, in or close to Minnesota. Faegre & Benson, the law firm in Minneapolis, did the legal work pro bono, Alexander says. “They said, this town needs this.”
The group fills the spot traditionally held by angel investors, providing early-stage funding after the four Fs (founders, friends, family and federal grants.) “I could see us making a $25,000 preliminary investment to get someone over the first hump,” he says.
His group has a formal process for business owners to follow, detailed on the Web site. “Our Web site tells you exactly what to do,” he says. By contrast, many local business people are angel investors, but it’s hard to find out who they are and what they want.
John Alexander, TC Angels LLC: 612.377.5825; john@tcangels.com; www.tcangels.com
