Helping hands
Angel investor network o ers entrepreneurs alternate source of capital

Banks aren’t the only option for capital-hungry entrepreneurs. In Canada’s Far East, the Newfoundland and Labrador Angel Network offers an alternative for people looking for an infusion of cash to launch or expand their businesses. The Network, created by the St. John’s Board of Trade in 2006, represents “angel” investors (successful venture capitalists looking for an opportunity in emerging businesses).

Charlie Oliver, CEO of Martek, a St. John’s-based real estate company, is one of 21 angel investors currently involved in the Network. Businesses must apply to be considered by investors, and they go through a rigorous process that includes submitting a business plan and attending meetings with potential investors before a deal is struck. Angels typically invest $10,000 to $25,000 in each transaction.

Oliver says one of the big plusses entrepreneurs get from being involved with the Network is the advice they get from angel investors who have been there and done that.

“The mentoring role is probably more significant than the cash we put in,” Oliver says.

Despite the sage advice the entrepreneurs get, these deals tend to be high risk propositions and the angels don’t jump at every opportunity. The Network is currently involved in eight deals, but about 70 companies are reviewed each year.

Why do the angels do this if there’s a good chance the return on their investment will be minimal — if there is a return at all? Sometimes it’s because they believe in the business or the particular entrepreneur. It might also be because the angel investors know what it’s like to try to finance a novel, but risky, business idea. Oliver says a desire to be altruistic is a big reason why he’s involved. “Why does one teach? Why does one coach? I want to see other businesses succeed,” Oliver says. “To be able to be more of a teacher and mentor, that feels good.”