Angel Options: The growth of Angel groups around the world has been facilitated by the use of standardized methods and tools. This has been vital in creating a more efficient seed-capital market. It has expanded startup opportunities around the country and not just in silicon valley. However, it has also been very limiting by targeting only equity investments in companies likely to be acquired quickly.
Simply put, we don’t see many companies that fit the tools and techniques we’ve had available. Many of our regional companies have no intention of selling but still need growth capital. While they may lack the historic cash flow (remember, they want the money to create greater cash flow) or adequate collateral, they are still vital to our regional economy and they represent attractive investment opportunities.
To service this sector, BWA is establishing a relationship with a regional bank that will create subordinate notes. These notes will be matched by the banks senior debt. We would purchase the subordinate notes at the time of closing. We believe that we would place $1,000,000 in notes annually with yields of 8 – 12%. The notes would continue to be serviced by the bank and will typically have a five year maturity.
If you would have interest in participating, we are considering packaging the first 250 units at $20k each. Contact me at firstname.lastname@example.org, or Judy Morrison, email@example.com, if you would like to learn more.
And speaking of non-traditional deals, our first locally developed medical device opportunity, Joint Purification Systems, presented at our dinner event last month at the Saginaw Club. The issue – this is a project, not an ongoing business. It’s like investing in an oil well, not buying a drilling company.