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Wednesday, 20 May 2015 23:58

15 in ’15: Grand Angels aims to invest up to $1.5 million in 15 deals this year

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After putting about $1 million into four companies during the early months of 2015, Grand Angels looks to close three more deals in the coming weeks.

The upcoming investments will put the Holland-based angel investment group well on its way to meeting a 2015 goal of investing in 15 deals for a collective $1.5 million. Grand Angels also seeks to launch a new investment fund this year.

The 2015 investment goal excludes a separate co-investment fund of nearly $2 million formed in 2011 where the angel group as a single investor put money into deals alongside individual members, boosting investment totals in prior years. That fund is now fully deployed, said Grand Angels President Jody Vanderwel.

As Grand Angels heads toward midyear and the closing of its latest investments, members are seeing “very good deal flow” and higher-quality prospects, Vanderwel said. Activity has begun to exceed pre-recession levels, she said.

“I think the quality of the deals in Michigan over just the last five years has significantly improved, and the quantity has as well,” Vanderwel said. “This is a great place to make investments.”

In 2014, members of Grand Angels invested $2.5 million in 12 deals, four of which were new, while eight were follow-on investments in existing portfolio companies. All of the deals were done in syndication with 14 other angel groups or venture capital funds in the state.

Since forming in 2004, Grand Angels has invested $16.2 million through 77 financing rounds in 32 companies.

Vanderwel described 2014 as “another great year” for Grand Angels. The organization entered this year with a goal of “broadening our deal-sourcing efforts and re-evaluating how we look for deals as part of our growth and diversification goals for 2015,” Vanderwel and Chairman Rich Lievense wrote in the group’s recently issued annual report.

One of nine angel groups across Michigan, Grand Angels has directed much of its capital over the years toward life sciences and technology such as digital media, software and information technology. Grand Angels’ members in 2014 started adding to the mix advanced manufacturing and materials, as well as advanced technologies in agriculture and food.

Grand Angels “has never been real specific” about advanced manufacturing and agriculture but has done deals in those sectors in the past, Vanderwel said. By specifically adding them to its investment focus, Grand Angels is acting a little more intentionally to diversify its investment portfolio.

“I hope it will sharpen our investment focus a little bit, but it isn’t going to change it all that much. It also makes us think a little more carefully about what are the business sectors we’re really going to go after,” Vanderwel said. “(W)e want to make sure … we’re attune to where the opportunities are going to be in the future and don’t focus so much on the things that we’re so used to doing that we don’t see shifts in the opportunities out there where the market might be changing in the future.”

2015 will also see Grand Angels launch a new venture fund. The group last December filed documents with federal securities regulators indicating that Grand Angels Venture Fund II LLC would seek to raise $20 million from investors.

Grand Angels this year will also work to recruit new members. After years of a nearly 100 percent annual renewal rate, membership declined to 39 by the end of 2014, after peaking at 50 during the year, as some investors relocated from West Michigan.

“All of a sudden, this is the year where a number of people either really moved to Florida and just don’t have much Michigan presence anymore, or had other changes in their lives and moved on in Michigan,” Vanderwel said. “We’ve just hit a year where there’s been transition in a bunch of people’s lives and part of being sustainable for the future is that some people kind of age out of this game for a variety of reasons.”

Grand Angels aims to grow membership back to 45 investors during the year and is seeking to recruit a “little lower” age demographic. Bringing younger investors into the angel group is “part of what’s going to make it sustainable” well into the future, Vanderwel said.

“It builds sustainability into the organization and brings people with a different perspective on business, on technology, on where the markets are going in a number of the business sectors we look at,” she said.

2015 DEALS

The four deals that Grand Angels closed so far in 2015 were:

Advanced Architectural Products Inc., an Allegan-based producer of an insulation system known as SMARTci that can significantly reduce the cost to heat and cool a building.
Blue Medora LLC, a software company based in Grand Rapids.
Ablative Solutions Inc., a Kalamazoo-based company that’s developed a new treatment for severe hypertension.
Gemphire Therapeutics Inc., an early-stage startup drug company based in Northville.

Read 3005 times Last modified on Monday, 08 June 2015 10:27

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