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WASHINGTON, D.C. – A bipartisan group of Senators tonight scored a victory that will provide strong protections for investors while promoting small business startups vital to job creation. A bipartisan amendment sponsored by Senators Kit Bond (R-MO) and Senate Banking Committee Chairman Christopher Dodd (D-CT) and co-sponsored by Senators Mark Warner (D-VA), Scott Brown (R-MA), Maria Cantwell (D-WA) and Mark Begich (D-AK) was adopted by voice vote as part of the financial reform bill being debated in the Senate.

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As posted in Fast Company Magazine

This is the best time for Angel Investors to partner with entrepreneurs, since the early stage investment community is going through a radical change.  VCs find it very challenging to relate to early stage ventures and their Founders, and these VCs are more likely not entrepreneurial.  Angel Groups who used to promote entrepreneurialism have been acting more like traditional VCs.   Individual Angel Investors with strong business skills and extensive operations experience are in the ideal position to bring about the financial and operational revitalization needed to create new businesses.

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The following article is an except from a recent Issue Brief by the NGA Center for Best Practices in Washington, DC[1] pointing to strategies that states should use to promote Angel Investment for economic growth. Note that Louisiana currently does none of the recommended actions.

The Issue Brief stated that Governors are increasingly interested in entrepreneurship because of its key role in driving business innovation. While entrepreneurs face several common challenges, including developing business acumen and making connections with experts and mentors, often their greatest challenge is raising capital. Entrepreneurs’ emerging technologies are frequently viewed as too risky for banks, private equity firms and venture capitalists, yet many fledgling companies require more investment to grow than can be raised from friends and family. Angel investors are increasingly stepping in to fill this gap.

Angel investors are wealthy individuals with business or technology backgrounds who provide entrepreneurs with capital, connections, and guidance. They provide early-stage financing in a space once occupied by venture capitalists, who now invest primarily in larger deals and more mature companies. Angels invest in local and regional ventures, primarily in high-technology sectors, giving their investments local impact. In the past decade, many angel investors have formed and joined groups because investing through groups offers several advantages, most notably a large and more diverse portfolio, access to expertise, and higher deal flow.

States increasingly recognize the value of angel investments and are adopting policies to promote them. Some have created statewide networks to assist the formation of angel groups, link angel groups to share best practices, and help groups invest together in companies that need more funding than a single group can offer. Governors have several options to encourage the formation of angel groups to expand early-stage investment

• Promote seminars on private equity investment for current and potential angel investors;
•  Assist entrepreneurs by connecting them with existing entrepreneurship education and services;
•  Facilitate the formation of statewide angel groups to organize and empower local leadership and build investor knowledge;
•  Ensure that angel investors are well-represented on state economic development advisory boards, along with entrepreneurs, universities, and other industry representatives; and
•  Identify and collect metrics to monitor the impact on policies to encourage angel investment.

South Coast Angel Fund co-founders Choose Taurman and Clayton White will review strategies for raising capital for various stages in a business life cycle. Perhaps the greatest challenge for the startup entrepreneur is raising capital. What are the sources of capital available and how are they accessed. This is a min-version of the Investor Ready Entrepreneur full-day seminar.

The seminar is presented by the Louisiana Technology Council and the Louisiana Technology Park and. Click here to register. 

When: January 20, 2010 from 5:30 - 7:00 p.m.

Where: Louisiana Technology Park (7117 Florida Boulevard, Baton Rouge, LA 70806 - (225) 218-1100 )

Cost: $5 to La Technology Council members, $20 for non-members (all proceeds go to the LA Tech Council)

Reservations: Click Here to register.

South Coast Angel Fund is pleased to announce that it has joined the national Angel Capital Association in an effort to further enhance its ability to make better informed, sophisticated investments in local entrepreneurial start-up companies. South Coast is the only angel group in Louisiana listed as a member.

Angel investors have supported entrepreneurs for decades. The economic conditions of the past few years, however, have highlighted that being a good investor and supporter of new companies requires attention, discipline and continuous improvement. Angel groups have been growing as a way to institutionalize these processes – and the Angel Capital Association takes that a step further by sharing the best practices for considering and making investments, linking the expertise of different groups across the country, providing new tools for portfolio management and mentoring promising entrepreneurs.

The Angel Capital Association is the trade association of angel investment groups in North America. Founded by angel investment groups in the United States and Canada to help maximize the success of group based angel investors, ACA accomplishes its mission by providing professional development, best practices, networking and collaboration opportunities for angel investors who belong to member angel groups.  More than 165 angel groups are members of ACA, and those groups represent about 7,000 accredited angel investors.  More information is available at www.angelcapitalassociation.org.

2010 will bring more promising investment opportunities for angel investors and will feature more exits than any year in the past decade. That’s the conclusion of a panel discussion at the AlwaysOn Venture Summit in Menlo Park, Calif. featuring several prominent angels and veteran investors. The panel suggested that there will likely be 50 or more initial public offerings in 2010, making it a banner year for start-ups and their financial backers.

The panel also suggested that public technology companies will start acquiring smaller companies again, in the interest of staying competitive. For example, with Google’s recent acquisition of AdMob Inc., a mobile ad network, for $750 million in stock, every other media company is realizing that they will have to acquire innovation just to keep up.

Other panelists said promising new industry segments are emerging. With the proliferation of social media and government spending on healthcare software and cleantech, angel investors will have ample opportunities in emerging business areas.

Investors will be looking for start-ups that can go a long way on a small budget. For cleantech that means a focus on material sciences, software and thermoelectrics. Other panelists said new communications platforms like Twitter have sparked a revolution of real-time content sharing that will spawn hundreds of new companies and provide lucrative returns.

The conclusion was that 2010 will be a time of opportunity for angels.

Angel investors make investments in start-up and entrepreneurial companies - the type of companies that are key to a thriving economy and high-paying jobs. Due to their nature, these are risky investments. To incent these investments, most states have some type of incentives to help offset a part of the investment risk. As an example, North Dakota recently passed a law that extends a 45% tax credit to angel investors who back homegrown businesses. Angel Investor Credits are key to a thriving entrepreneurial ecosystem.

The Louisiana Angel Tax Credit program placed the state in a very competitive position with most other states. Unfortunately, that competitive edge was lost when the credit bill was allowed to sunset due to time constraints on the legislature in the last session. In order to regain that competitive position, an effort is underway to replace the credit bill with new incentives for Angel Investors in the upcoming legislative session that begins in March 2010.

Time is of the essence and things need to begin progressing rapidly.  You are invited to join that effort by attending an Angel Incentives strategy meeting on Wednesday, December 16th. For More information, contact South Coast Angel Fund at info@southcoastangelfund.com .

Angel groups have grown significantly in the last decade, as more and more organizations have been established and more individual angels have joined the groups. Angel groups now exist every American state and Canadian province. In May of 2008, the Angel Capital Association listed 165 members. Recently the Angel Capital Education Foundation listed 281 Angel groups in 49 US states and Canada. The only state not represented was Louisiana. That number is now 282 with the addition of South Coast Angel Fund, which represents Louisiana on that list.

The term “angel” originated in the early 1900s and referred to investors who made risky investments to support Broadway theatrical productions. Today, the term “angel” refers to high-net worth individuals, or “accredited investors,” who typically invest in and support start-up companies in their early stages of growth.

Angel groups offer accredited angel investors the opportunity to invest in and help build successful companies – while also having a good time. Every group is different in terms of investment strategy and culture, but Angel groups offer interested investors a variety of benefits such as:

1. An expectation of a significant return on their investment.

2. A disciplined approach to investing imposed by a both the due diligence process and the diversity of expertise provided by a group of members with various backgrounds.

3. Lower risks by diversification of investments.

4. Social benefits in meeting and working with other successful individuals. Participation in the screening, due diligence or monitoring teams is an enjoyable, educational and rewarding experience.

5. A strong sense of satisfaction from aiding and mentoring entrepreneurs.

6. Investments Louisiana businesses may qualify for Louisiana Tax Credits such as the Digital Interactive Media Credits and other Louisiana incentive programs.

Accredited Investors

Individual members of South Coast must be accredited investors. The federal securities laws define the term “accredited investor” in Rule 501 of Regulation D as a person who has individual net worth, or joint net worth with the person’s spouse in excess of $1 million at the time of the investment or has income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year.

South Coast Angel Fund

Complete the online application

SEC Information

The following information is provided at http://www.sec.gov.

The laws and rules that govern the securities industry in the United States derive from a simple and straightforward concept: all investors, whether large institutions or private individuals, should have access to certain basic facts about an investment prior to buying it, and so long as they hold it. To achieve this, the SEC requires public companies to disclose meaningful financial and other information to the public. This provides a common pool of knowledge for all investors to use to judge for themselves whether to buy, sell, or hold a particular security. Only through the steady flow of timely, comprehensive, and accurate information can people make sound investment decisions.

The SEC oversees the key participants in the securities world, including securities exchanges, securities brokers and dealers, investment advisors, and mutual funds. Here the SEC is concerned primarily with promoting the disclosure of important market-related information, maintaining fair dealing, and protecting against fraud.

Under the Securities Act of 1933, a company that offers or sells its securities must register the securities with the SEC or fid an exemption from the registration requirements. The Act provides companies with a number of exemptions. For some of the exemptions, such as rules 505 and 506 of Regulation D, a company may sell its securities to what are known as “accredited investors”.

One of the major sources of information on which the SEC relies to bring enforcement action is investors themselves — another reason that educated and careful investors are so critical to the functioning of efficient markets. To help support investor education, the SEC offers the public a wealth of educational information on their Internet website, which also includes the EDGAR database of disclosure documents that public companies are required to file with the Commission.

For more information, visit the U.S. Securities and Exchange Commission website at http://www.sec.gov.

Contact the South Coast Angels at: 

3810 Post Oak Ave.
New Orleans, LA 70131
504.342.4697

SOUTH COAST ANGEL FUND
info@southcoastangelfund.com

South Coast Angel Fund LLC

Contact Information

South Coast Angels

757 St. Charles Ave.
Suite 302
New Orleans, LA 70130
504.342.4697

SOUTH COAST ANGEL FUND INFORMATION

info@southcoastangelfund.com