Are you interested in developing the economy in our region? Do you have specialized business expertise or experience to offer an entrepreneur?
Do you have the desire to invest financial resources, of any amount, to grow our local economy? Are you a successful investor, yet bored with Wall Street’s offerings?
If you answered yes to any of the above questions, keep reading as we may have just the right opportunity for you. If you answered no for whatever reason, keep reading any way as you might just change your answer.
Tomorrow will be the annual StartupLounge. This invitation-only event is a partnership with The Creative Coast, the Advanced Technology Development Center (ATDC) affiliated with Georgia Tech, and the Technology Association of Georgia (TAG).
For this year’s event, we had more than 50 emerging companies and enthusiastic entrepreneurs apply for the opportunity to participate in the fourth annual StartupLounge. After much deliberation, we selected 25 candidates who will get to mingle, mix and give their message to 30-plus pre-approved investors who are actively seeking to develop Savannah’s local economy.
Investors in attendance are handpicked, well known and experienced check writers from Atlanta, Greenville and Savannah. Local investors include members of Ariel Southeast Angel Partners, many of whom serve as mentors to and investors in budding entrepreneurs, emerging companies and high growth startups. Maybe this sounds like you?
Who is a potential investor? It could be anyone who cares about building and diversifying our economy. Or it could be someone who likes the thrill of seeing their investment up close and personal.
Yes, these are definitely risky investments as only one out of five succeeds typically,
but that one can be the unique idea that develops, grows, thrives and bursts wide open as the next big thing.
Another source of investors could be through crowd funding like a Kickstarter campaign. And uniquely in Georgia, a contribution through crowd funding can result in an equity investment.
More likely, an investment is in the form of a direct check in exchange for stock or equity in the company. This is the stage that is sometimes intimidating for new or first time investors: Is there a purchase agreement? Who sets the “price” or value of the company? Who does the due diligence? These are all common concerns we hear.
Fortunately there are reasonable answers to all these questions. Sure, there is a purchase agreement. And companies seeking investors must register the company’s articles of incorporation with the state and authorize a specific number of shares of stock.
Additionally, the company will have a private placement memorandum (PPM) which is shared with all potential investors. The PPM enumerates the numerous risks for such investments, company governance and financial reporting.
Generally, there is a lead investor who is almost always a seasoned backer of startups. In Savannah, that entity is more often an investor like Ariel Southeast Angel Partners or the individuals visiting this week from Atlanta and Greenville.
These sorts of investors are experienced at due diligence and valuation. They love taking the lead and know how to handle negotiations. Fortunately, they also welcome co-investors (and first time investors) on viable opportunities.
These experienced investors are known as the “smart money,” and they encourage local “passive” money investors. Don’t misinterpret the terms: When it comes to investing, the opposite of smart is not “dumb;” it is “passive.” With experience, passive investors become smart money.
For those of you with the resources, consider including startup investing in your “entertainment” budget. You might not get rich, but you will definitely give the local economy a boost and you’ll learn a lot about business, entrepreneurship, investing and yourself in the process.
Think about it: $10,000 a year in golf club fees may allow you to work on your handicap and enjoy the outdoors, but a similar investment in a bright idea can create jobs in our local market and maybe even change the world.
Bea Wray is the executive director of The Creative Coast, a not-for-profit organization that promotes the creative and entrepreneurial community within the region. Bea can be reached at 912-447-8457 or bea@thecreativecoast.org.
By Bea Wray