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Grand Angels Broadens Investment Approach (back)
2/5/2009
Grand Angels broadens investment approach
Posted by Mark Sanchez | Business Review Western Michigan February 05, 2009 08:00AM
Five years after launching, Grand Angels has broadened its approach to the market.
Rather than focus on startup companies moving toward a product or service launch, the Holland-based angel-investing group now also is looking at doing deals with mature businesses growing into new frontiers.
Grand Angels, for instance, now will examine investments in well-established companies that want to expand their geographic market or penetrate a new product or service category.
Vanderwel
Grand Angels President Jody Vanderwel calls the change a natural evolution for the investment group that meets a market demand in West Michigan.
Though coincidental in its timing, the broader approach comes amid the financial crisis and tight credit market, which make it harder for even well-established businesses to access capital.
"The market is saying the opportunities are going to be there, and we're looking for good deals. So why wouldn't we look at some of these as well?" Vanderwel said.
"We're just really expanding the kind of businesses we'll look at."
The tight credit market, she said, plays into Grand Angels's favor.
"I think it bring us more deals. We're going to get more opportunities," Vanderwel said.
Formed in January 2004 by former banker Chuck Stoddard and providing seed capital of $250,000 to $2 million per deal, Grand Angels has 40 members who have made 14 investments that collectively total more than $5 million.
Investors in the group have exited three companies, one of which remains in business.
The 33 percent success rate for the investment group compares to an industry average of 10 percent, Vanderwel noted.
Grand Angels last week announced two new investments.
Investors provided second-round funding for Creative Byline in Holland, a Web-based company that electronically reviews manuscripts for publishers based on a set criteria. And Plumstone, a company that makes products that measure sunlight, allowing homeowners to better position certain plants in their garden, received first-round funding from Grand Angels. The funding will enable Plumstone to pay for a major production run and a national marketing push.
In 2009, Grand Angel members aim to do two or three deals as lead investors in their target markets of Kent, Ottawa and Muskegon counties, Vanderwel said, plus another five or six co-investments done with a partner or partners who would lead the deal.
Vanderwel stresses that, with the tweak in its focus, Grand Angels is not abandoning investments in early-stage companies nor is it altering its risk tolerance.
"What we're about at the end of the day is making smart investments," she said. "We still want to invest in a product that has a chance to be disruptive in its market."
Copyright Business Review 2009. Reprinted with permission.
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