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RESEARCH TRIANGLE…Tom Vass wants to create a new capital market infrastructure in North Carolina.
Vass coordinates the second Gathering of Angels meeting in Pinehurst on Wednesday. It will bring a handful of angel investors together to network and hear startups do 20-minute PowerPoint presentations. At least one NC company, Chapel Hill-based Source Food Technology, plans to attend.
Vass says the previous Pinehurst Gathering of Angels drew “five excellent companies, about ten accredited investors and 20 observers. “Paper International, based in Southern Pines, may actually raise some money from it,” Vass says.
Vass believes NC startups desperately need new ways to connect with private “angel” investors. He points to companies such as Oculan, “which died, putting 50 people out of work, because they couldn’t raise $3 million.”
In 2001, Vass tried to establish a closed regional mutual fund to direct capital into private companies in three prominent industrial clusters. Vass, who heads the Raleigh Corporate Investment Center, wants to see regions in the state reverse their thinking and “recruit capital, not companies.”
Vass has started the ball rolling on a multi-pronged approach to the problem. The first he says is “a brand new idea for a service offering in the capital markets,” that would give startups alternatives to making the rounds of the local venture funds.
Vass calls it a private placement exchange (PPE). The PPE, which Vass would run through his Corporate Investment Center, intends to help companies that need from $1 million to $10 million in growth capital.
The companies would do self-underwriting via the services the PPE offers. Vass has already established relationships with Durham’s 21 CD and Chicago-based The Investor Relations Company to provide startups with special services.
The basic idea is that each startup to send a promotional CD developed through 21 CD to 5,000 accredited private investors. The Investor Relations Company will provide public relations services to the companies, which would each have an investor relations Web page.
The password protected Web page would include official documents including pre-offering deal terms. Vass says a national investment bank will clear any transactions. The PPE would also coordinate company presentations to regional angel forums and through Web casts. The companies would be listed on regional and global PPE Web sites, which would continually update information about the company in both secure and public sections.
Once the investor relations Web page is in place, Vass says, “It provides the mechanism for on-going shareholder communications via periodic financial reporting just like a public company does.”
Vass says each company that signs up for his services will get a free listing on the PPE until it has enough companies to attract investor interest.
Regional events
However, Vass is also developing regional NC angel forums different from The Gathering of Angels.
“Most companies raise capital within 50 miles of where they are located,” Vass says, “and that’s true for public and private companies alike. That’s why it’s so important to have regional investor forums in places like Pinehurst, Wilmington, and High Point.”
Vass says he wants to combine using the Web as a global platform for raising capital with something local, such as the regional angel investor forums. “You would tie it into a network of local professional advisors, lawyers, CPAs. They have an incentive to be part of that local infrastructure.”
Vass wants to hold the regional investment forums in Capitol City Clubs in Lexingtion, Burlington, Goldsboro, Wilmington, and Pinehurst. “They should begin this fall with a format similar to what we’re doing in Pinehurst Wednesday,” he says. “We’ll bring angels and companies together for an hour of social networking and 20 minute presentations.”
Kerry Ventures?
When Presidential candidate Sen. John Kerry and his wife Teresa Heinz Kerry released their financial statements, Wired News noted they are seasoned venture investors.
Their portfolio includes investments in VC firms that specialize in healthcare, information technology and communications. They have holdings with three well known venture firms, Summit Ventures and Polaris Venture Partners in Massachusetts, and with Salix Ventures.
Those firms have invested in a number of successful Internet and technology startups that went on to launch successful IPOs. Summit’s investments include WebEx (WEBX), which sells technology for conducting online meetings; Ditech Communications (DITC), which makes telecom equipment, and Powerwave Technologies (PWAV), which develops wireless equipment.
The Corporate Investment Center: www.corporateinvestment.net