SPN interviews Jay Wilkinson of Nebraska Angels
Before Omaha-based SkyVu Pictures received national attention with its first iPhone app, Battle Bears, it had the attention of a small group of angel investors in its home state. The group, Nebraska Angels, is made of up about 35 individuals who collaborate on due diligence while making investment decisions on their own.
Formed in 2006 by John Brasch, whom Angel board member Jay Wilkinson calls a "champion of entrepreneurship throughout his entire career," the organization's mission is to provide opportunities for its members to obtain outstanding financial returns by investing in promising early-stage companies. Additionally, Wilkinson explained, "[It] was formed here to help encourage more young entrepreneurs in the state to more bring business ideas to the table."
According to Wilkinson, the role of an angel investor is to fill the gap that exists between seeking funding from the "three f's" -- friends, family, and fools -- and pitching to a venture capital firm. "We're looking at early stage opportunities that have a high-growth potential," Jay explained. "When we come to the table and work with a small business that is just getting rolling we bring more than money to the table. It's very traditional that several of our members will become members of the company's board or on their advisory team."
Their website, nebraskaangels.org/site, states that they "provide seed and early-stage capital in the range of $150K-$750K, an investment range not generally served by venture capital funds." Additionally, they make it clear that although they're located in Nebraska, they'll consider investing outsite the state: "Our primary focus is companies with a Nebraska presence or other ties to the state, although exceptions may be made as dictated by the opportunity."
Jay touched on this aspect of the organization as well as their process of picking companies to feature in their monthly meetings. He made the point, recollecting the wisdom of Warren Buffett, that above all they're looking to invest in the person running the company as much as the company itself. Each month they select two companies to present in front of their members.
Check out my interview with Wilkinson to hear more about what type of companies the Angels invest in, the strategy of an angle investor, and his thoughts on additions that could be made to our entrepreneurial community.
ARCHIVED COMMENTS
What a great interview... I think that this is important for us here in Nebraska to learn. Not only on the start-up side, but once successful to return to the roots and help others. This is true Economic Development... Great job once again SPN!
Very interesting, I never knew about an "in between" stage of investing. Getting the advice and knowledge of the group sounds more valuable than the funds.
Jay = I AGREE with you!
- There is a gap in the biz community, we are missing leaders/facilitators to bring the Start-ups and the entities that say they are "helping" Start-ups together in Nebraska.
I hope to be part of the solution to that problem - looking forward to continuing the conversation on Facebook and on SPN.
This is a great interview and I love the openness and transparency that Jay provided in this. Great job Danny and props to Jay for being so forthright in the interview.
I understand the angel investing part, especially what's highlighted in this interview above (mostly because of Jay's candor). What I don't understand though is these incubators that keep popping up. I still don't understand what an incubator does. Most I've gotten from people is that it's a place to share information and collaborate. That's great, but can't I do that at HuHut with other entrepreneurs and not lose a % of my company? I think that's the biggest challenge of these incubators is for them to outline what exactly they provide to entrepreneurs and what value they would bring vs that same person talking with other entrepreneurs. I understand what Leap Ventures wants to do in that its sort of a precursor toward angel investing and helps make their pitch better and more organized but there are other incubators out there that can't seem to explain what exactly it is that they do. To hell with office space and advice. Work out of your basement and eat ramen noodles. It'll put hair on your chest and make you a better business person.
Great work SPN team!
Tim, in response to your comments about incubators, I don't think that moving to a particular location, office, etc. makes any deal a good deal or increases the likelihood for success. So, I don't necessarily disagree with you. I would like to direct you to Proxibid, one of Scott Technology Center's early incubator companies. I encourage you to contact Bruce Hoberman, their CEO and ask if being in or associated with an incubator was at all beneficial.
@ Tim
Incubators, Accelerators, Lolly Pop Guilds... it doesn't matter what you call them but the real value they must provide is a place for entrepreneurs/start-up company employees to go and realize that they are NOT alone in this process.
I do not think that providing space should constitute gaining a percentage of a company - early stage high growth companies don't need much space and in my opinion they should not need to give up equity to save $400 a month for a couple years.
However they do need "community" and engaging activities that builds their knowledge base - beyond just hearing about how another entrepreneur started a business... they need real NO BULL S*** kind of discussions about the really hard stuff that does "put hair on your chest" and kicks you when you're down kind of experiences. Coming out of those experiences and telling others about your own experiences of that sort builds a person and a company up and prepares them...that is the REAL value of "incubation."
That in my opinion can be facilitated by someone or some entity - NOT requiring an equity stake. Equity should only be given when resource providers add real value like: 1) Market Access to an Industry or Distribution Channel 2) Help with a Firm's "Critical Next Step" 3) Professional Level Advice to which costs would make up a large portion of income or current company valuation.
Tim, basements ARE very cheap starting points - but when creating profitable companies entrepreneurs rarely operate in a silo/vacuum and facilitating a community's engagement via "incubation" and access a knowledge base increases successful start-up launches - in my opinion.
I'm currently working out of my basement and eating ramen noodles. I hope it makes me a better business person. I sure as heck hope it doesn't put hair on my chest, though. (J/K)
Nice interview.