“Instead of Traverse City being the Cherry Capital of the world, we want the city to be the Tensioning Capital of the World.”
Chuckles follow the joke by financial advisor and presenter Gary Rakan of Hurricane Safety Systems, a Traverse City-based technology firm that produces treestand attachment systems and other tie-down products for hunters. The company is looking for investors – and so is presenting its pitch at a morning meeting of the Northern Michigan Angels (NMA).
NMA formed in 2012 with a two-fold mission: to help invigorate the region’s economic base “through the rapid growth of early-stage companies,” and to provide its roughly 18 members a “compelling financial return on their time commitment and invested capital.” In its short life, the angel investment group has entertained 36 pitches, investing in nearly a dozen Michigan companies including Altus Brands, Silikids, Advanced Battery Concepts and GreenLancer Energy.
Founding angel Ron Hurd says the group typically gravitates toward technology and manufacturing firms, but last week’s event included the group’s first agricultural presentation. Dan Vogler of Harietta Hills Trout Farm in Harrietta tells the gathered crowd his company has just secured a 20-year lease to open a second facility in Grayling, and is in the process of closing on a $210,000 loan from the Traverse City Area Chamber Foundation’s Regional Revolving Loan Fund.
“We want to increase our live (fish) weight production from 200,000 pounds to 600,000 pounds annually,” Vogler explains. With product already spoken for through a partnership with distributor Superior Foods Company, the company seems like a surefire investment opportunity – though Vogler will have to wait at least a day to learn how this particular group feels.
The meeting also includes a conference call pitch from RetroSense Therapeutics, an Ann Arbor-based biotechnology company NMA has invested in previously. The firm is seeking a second round of funding to help develop a “game-changing gene therapy” that will restore vision in patients suffering from blindness due to retinitis pigmentosa (RP) and advanced dry age-related macular degeneration (advanced dry-AMD). There are currently no FDA-approved therapies to improve or restore vision in patients with such conditions.
“If a subject starts out blind and then they can see, that’s a powerful demonstration of efficacy,” CEO Sean Ainsworth tells investors.
After NMA members discuss the pitches in a closed-door lunch meeting, NMA Executive Director Deanna Cannon says she typically lets companies know within a day or two if there is enough interest to circulate investment term sheets. Rather than operating as a managed fund, members decide individually if they want to invest, with a minimal $5,000 investing requirement – lower than many angel groups’ standard minimum of $25,000.
NMA is rarely short on entrepreneurs looking for money – many are “starved for capital,” says Hurd – but finding members is a different matter. Securities & Exchange Commission regulations mandate that angel members must be accredited investors, meaning they must have a net worth of at least one million dollars (not including the value of their primary residence), or have income of at least $200,000 each year for the past two years.
But Hurd points to a legislative push to loosen those regulations – as well as new and emerging forms of investment, like crowdfunding – as potential opportunities to make NMA membership accessible to a wider audience in the future.
“People have this impression of us as fat cats sitting around, or being like the (TV show) Shark Tank,” says Hurd. “But it’s not like that. We’re here to help small businesses grow. We’re just trying to provide capital these companies can’t find anywhere else.”