The Buffalo Angels recently invested in a San Diego, California-based startup. It’s not what the group of local investors typically does, but this was a special circumstance, according to Jack McGowan, executive director.
Well iQ, an online patient engagement platform, has multiple customers in the Buffalo and Rochester areas, including Excelsior Orthopedics, a New York state practice with multiple locations in Western New York.
A group of local Excelsior doctors were so impressed with the startup that they wanted to invest in the business, and they approached the Buffalo Angels to lead the round, according to McGowan.
“It is unique when a very satisfied customer comes to us and says, ‘Hey, we really like this company,’ ” he said. “That was pretty compelling.”
Because of the local interest and the startup’s local customer and partner base, he started the investment process to gauge the Buffalo Angels' interest.
Well iQ recently closed on a $750,000 Series A round, and between its fund and individual members’ investments, Buffalo Angels contributed $145,000 to the round.
Two Excelsior physicians, Jason Matuszak and Nicholas Violante, invested as well and became advisers to Well iQ’s board of directors, according to a press release.
The Buffalo Angels, which has 95 members, is often associated with the Western New York Venture Association, which has been hosting meetings aimed at boosting local startup companies since the mid-1990s. The group has invested $6.45 million in 51 funding rounds since 2014.
Last year, the group invested a little over $800,000 in five companies, according to McGowan.
Up until Well iQ, all of the group’s investments have been in based in Western New York at the time the funding was given. Some moved their headquarters after the initial investment was made.
“We certainly want to invest in good companies that provide good financial return, but we also want to invest in companies locally here that, if successful, will grow and create value in the region,” McGowan said.
When considering investment opportunities, the group focuses on a strong market fit for the startups’ services and/or products. It’s also important that the business has the potential to grow and provide good returns on investment and that other investors are willing to be part of the round.
The Buffalo Angels’ investments average at about $125,000 per contribution. The group has raised two member-managed funds totaling $2.17 million and have enough capital left for another two or three investments, depending on the size of the contributions.
