Grand Angels Investing $20 Million into Michigan’s GrowthBy Jane Whitttington on March 25th, 2016 /
Angels don’t always come with wings and halos. Sometimes they come in the form of pragmatic businessmen and women who are willing to take a chance on a new venture and are ready to share funding, time, and talent to help early stage companies succeed. Grand Angels, located in Holland and one of Michigan’s top investment groups, does just that. Since their founding in 2004, their members have invested almost $20 million; in 2015 alone, they invested close to $3.5 million in businesses and the people behind them. When they find someone whom they believe has the ability, passion and discipline to flourish, Grand Angels partners with them to achieve their mutual goals.
According to Paul D’Amato, one of Grand Angels’ 40 or so members who also serves on the Board of Directors, they have a few niche focuses for their investment fund.
“We invest in early stage companies primarily in advanced manufacturing, life sciences, software and technology and food and advanced agriculture. We typically invest from $250,000 to $1 million,” he said.
About 90% of investments are inside the state of Michigan, though they look to companies in neighboring states as well.
“We are interested in investments that positively impact business growth, job creation and the attraction and retention of employees,” he said. “With our ‘hands on’ approach, we try to stay within driving distance to the companies in which we invest. We also look at the possibility of bringing businesses from other states into Michigan.”
Grand Angels’ partnership with the companies they help fund goes beyond merely the financial support they provide. The members of Grand Angels are successful entrepreneurs and business people themselves and serve the companies in which they invest by providing counsel and guidance, networking opportunities and connections to service providers, customers, management and capital. D’Amato says that once they invest in a company, it’s important for them to be involved.
“We want to add value. Working with companies in the early stages of development gives us the opportunity to guide their growth and development,” he said.
Their investments are categorized as either debt investments or equity investments. In an equity investment, Grand Angels buys an asset and their profit is related to the asset’s performance. In a debt investment, the profit is not directly related to the performance of the borrower. D’Amato says that about 40 percent of their investments are equity investments, and the other 60 percent is debt investment. The debt can convert to equity later. Co-investment is also an option, and, in fact, Grand Angels almost always has partners in their investments.
The group also looks to many Michigan universities for new technologies, products and ideas including the University of Michigan.
“Entrepreneurs understand that while there may failures, there certainly won’t be any successes unless one tries. There are amazing opportunities in Michigan for business success. In our work, we want to help companies succeed; that helps us all,” he said.
For more information on Grand Angels, visit their website at www.grandangels.org.