We are shining the LimeLight – WRAL TechWire’s newest feature – today on Harbright Ventures, a Cary-based early-stage investment fund
[LimeLight aims to provide the WRAL TechWire audience with meaningful ways to share praiseworthy news and updates statewide. Did one of your employees close a big deal? Give them some recognition. Did your team make a big impact in the community? Share the good news. Did your friend just launch a startup? Get the word out.]
CARY — Harbright Ventures, a Cary-based early-stage investment fund, expects the “windfall” from a record exit of one of its portfolio companies to boost its fund to about $4.5 million.
Harbright invested about $2.8 million in Florida-based Ascyrus Medical, a company developing a game-changing treatment for aortic dissections. Atlanta-based CryoLife (NYSE: CRY) acquired Ascyrus last month for about $200 million. That will result in a distribution of about $15 million to Harbright’s investors.
Most of Harbright’s 45 investors are from North Carolina and the firm’s first investments were in NC startups, said John Michael Harlow, managing director of Harbright Ventures, in an interview with WRAL Techwire.
He said hundreds of lives have already been saved by the Ascyrus product and Cryolife will expand it to many more markets, potentially saving tens of thousands of lives a year.
The firm will initially invest smaller amounts than many venture firms, as little as $25,000 to start. It looks for “overlooked science” by companies that may be in places like Kingston rather than the Research Triangle, said Harlow. It’s also interested in startups by women and people of color.
It learned from one of its early investments in Raleigh-based SlatePlate, a consumer product company, that it doesn’t have the bandwidth to do both operations and investments, he noted. If a company needs help, “We direct them to someone,” he said.
Harbright has made follow-on investments in portfolio companies but no new ones during the pandemic, Harlow said. He pointed out that many angel investment groups wan to meet personally with founders and management teams, which is a problem in the pandemic environment. “A lot of groups want to see people face-to-face, limiting capital raising ability.”
Companies are having difficulty getting sales reps out and potential clients are not looking to spend money, which also presents problems, he said.
A lot of the firm’s time this year was taken up by the exit, but Harbright is planning its next steps, looking as much as six years ahead. It plans to raise additional funds, although Harlow said Covid may impact how much it can raise.
The company asks entrepreneurs seeking funding to consider two sets of questions that any startup seeking capital would be wise to consider.
- What value do you create or problem(s) do you solve for customers?
- Does your product or service save customers, time, money or other resources?
- What is the customer currently experiencing that your product or service resolves?
- Does your product or service create new revenue opportunities for your customers?
- How effective is your solution
- ?For consumer products, does your product or service create a user experience that doesn’t currently exist or that’s better than competitors?
- What other benefits do you create for your customers?
- What specific aspects of your product or service create value?
- Who are the customers that will buy this product, and why?
Additional considerations it recommends include:
- Where are you on the path to commercialization?
- How will your product or service be distributed?
- How will you make money and reach profitability?
- Who are the key members of your team?
- What is the moat around your business or competitive advantages?
- How would you characterize your IP?
- Why are you raising capital and what will it be used for?
- What are the terms of the investment?