By Selena Larson
Several East Valley economic development and professional organizations are teaming up for the Angel Investor Boot Camp, a program providing educational information for investing in small companies.
East Valley economic developers from Tempe, Mesa and Chandler, in partnership with Phoenix Law office Quarles & Brady; Arizona Technology Investor Forum (ATIF), a group of angel investors specializing in technology business; venture accelerator and management firm Tallwave; and Local First Arizona, will be presenting the educational series in each city through 2012. Potential investors can learn the basics of investing in new companies as well as learn about the exciting entrepreneur business blossoming in the Valley.
“We want to show investors there is more to invest in Arizona than just real estate,” said Micah Miranda, Economic Development Specialist for the City of Tempe.
The educational seminars are scheduled to happen once a quarter throughout the East Valley. The first, with 30 participants, was in January.
“The idea is that angel investors may not know what is available,” said Tempe Councilwoman Onnie Shekerjian, Chair of the Council Committee on Technology, Economic & Community Development. “We want to give people the knowledge available and how to connect with entrepreneurs.”
According to the National Bureau of Economic Research, startups and young firms play an important role in job creation, at almost a disproportionate level. With the continued rise in small business incubators across the Valley, it is clear many people are engaged and interested in the startup culture.
“The hope is that there is an increased likelihood of businesses staying in Tempe after they secure funding to launch their projects,” Councilwoman Shekerjian said.
Participants in the Angel Investor Boot Camps will get answers to frequently asked questions, including: Who are angel investors? How do they assess risk? How do they value opportunities? With answers to these questions, East Valley investors can look into funding tech startups.
In the East Valley, many cities rely on technology businesses as a source of job growth. In Tempe, 20 percent of jobs are based in tech companies, and in Chandler a similar amount.
The reliance on the technology industry continues to be recognized throughout the state. Earlier this year, the Arizona Commerce Authority (ACA) introduced a $3 million Arizona Innovation Challenge aimed at pioneering technology companies, the country’s largest monetary award for a technology commercialization challenge.
According to the ACA, “Arizona technology businesses are the state’s engine for economic transformation through wealth and job creation.”
East Valley economic developers have recognized this idea and decided to begin a program to teach investors how to rethink putting their money to work.
In 2011, the number of venture capital deals per 1 million residents in the country was around 11. In Arizona, the number was significantly below the national average at three. However, according to the City of Tempe, Arizona compares very favorably in its ability to secure Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) grants, which are a measure of a regions’ climate for innovative activity.
James Goulka, Managing Director for ATIF presented at the first Angel Investor Boot Camp in January, and stressed to the audience the importance of diversifying your portfolio, and that technology is a good place to invest.
“The kind of jobs created are high-paying jobs,” Goulka said. “As business grows, demand for other amenities and benefits grows as well. Everyone likes hanging out at successful places.”
The Arizona Technology Investor Forum, comprised of 46 investors, seeks out promising tech startups. This year, ATIF has invested almost $600,000 in new technology companies. One of their success stories is a technology business that has grown from six employees to 70 since the end of 2010.
Taking the lead in developing a start-up community in Tempe is Arizona State University and collaboration with the private sector. The hope is to overcome the challenge of limited access to angel and venture capital.
“The capital isn’t congruent with the high level of innovation,” Miranda said. “Brilliant individuals are living and working in the Valley, but there is no capital resources to develop a high technology cluster.”
The angel investor educational seminars, which attracted 30 attendees to the first meeting, will provide a framework and introduce businesses to the angel groups.
Kimber Lanning, Director of Local First Arizona, is excited about this new venture and the possibilities in opens up for businesses in Arizona. “We are finding innovators everywhere and bringing them to the table,” Lanning said.
As technology startups continue to grow and bring new business to Arizona, East Valley leadership wants to provide a reason for them to stay in Arizona. By encouraging funding from angel investors and partnerships with business leaders, the Valley can begin to develop as a technology cluster.
The date for the next Angel Investor Boot Camp is to be determined. For more information, visit www.tempe.gov.