Have an idea for a new product but not sure where to begin? The North Texas Angel Network (NTAN) is here to help.
NTAN is a non-profit corporation of angel investors looking to fund early-stage businesses that have quality product ideas but lack sufficient funding to get their products to market.
No idea is too big or too small to catch the attention of an angel investor, and NTAN’s portfolio is proof. It includes dozens of growing and established companies that began as underfunded ventures that needed a cash infusion and business mentorship to get off the ground.
Chris Wilkes, president of a McKinney, Texas mechanical engineering software firm, Sigmetrix, is on the board of NTAN. His interest began on Google when he was looking for an opportunity to invest in early stage businesses, rather than trading with mature established companies.
What sets the angel investor apart is not only a willingness to write checks, but to take up-and-coming entrepreneurs under their wings. It’s the kind of care and attention the average venture capitalist rarely provides.
Since angel investors typically get in on the action in a company’s startup phase and use their own money to do so, they are far more willing (and incentivized!) to keep a close eye on their business and lend any support the business owner might need along the way.
Angel investors don’t invest in everyone they meet. Groups like NTAN are particularly careful about researching and scrutinizing the products they invest in because at the end of the day angel investors do not want to throw their money away on failed products.
If, however, NTAN decides to fund your business, there’s a good chance that what you’re selling is something consumers will want to buy.
Here’s how the process works. NTAN members start by screening applicants that wish to give presentations to the 60-person organization. Applicants who make it past the screening phase are given the chance to deliver the most clear, comprehensive, and compelling presentation they possibly can.
At the organization’s monthly meeting, NTAN members sit down to hear the presentations and ask questions about the entrepreneur’s vision and his plan to reach that vision. After deliberation and debate, a select few are given a major monetary boost—typically between $200,000 and $800,000—to realize their dreams.
From there, members of NTAN, who are successful businesspeople in their own right, provide a wealth of knowledge and expertise to help their budding companies overcome obstacles, stay on track, and ultimately market and sell a successful product.
NTAN is also interested in attracting new angel investors. Those with a certain baseline net worth are encouraged to apply and become a fellow angel. The perks can be significant.
Members get to network with fellow angels, screen newly discovered talent and businesses before anyone else, diversify their investments, reduce inherent risk through co-investing, and gain automatic membership into the Angel Capital Association of America.
The biggest perk? Money. And the potential to make a lot of it.
The advice that Chris Wilkes would give upcoming entrepreneurs is “understand the finances.” Yes, you do need to have a passion for your invention, but total focus on technology is not all there is to being successful. You must know the financial aspect of your business. It takes money to build a business. A good mentor helps.
How is NTAN different from the popular and entertaining TV show “Shark Tank?”
“Actually, it is similar, but we are a lot nicer,” Chris said.
He joked that it is sort of like comparing the friendly people of Texas to the friendly people of New York.
An interesting and apt analogy —as the names implies, “Sharks” compete and “Angels” pool and help.
The members of the network including attorneys, experts in finance, sales and marketing with a variety of backgrounds to evaluate and mentor ideas.
One of NTAN’s recent success stories is Savara, Inc., a pharmaceutical company that has developed three inhalable medical treatments that are ready for clinical development and that will eventually allow patients with rare pulmonary conditions to inhale painless scheduled treatments.
Savara just debuted on the NASDAQ.
Angel investing isn’t just limited to North Texas. In 2015, the Center for Venture Research estimated that U.S. angel investors funded about 71,000 small business, granting a total of $24.6 billion dollars in exchange for company shares.
Local and national companies will continue to find success because of generous and passionate angel investors and organizations like the North Texas Angel Network, who give innovative individuals the chance to bring their ideas to life.