An effort to create more local angel investors, the NorCal AngelCon program, has amassed $105,000 to invest in a winning startup company in a competition this fall, for which applications are still open.
The program attracted about 15 investors willing to commit a minimum of $5,000 each to learn more about the fundamentals of investing in startup companies, said Cameron Law, executive director of The Carlsen Center for Innovation & Entrepreneurship at California State University Sacramento.
“We are hoping to create a replicable model year after year,” Law said.
Applications for the startups to join the competition are open until June 1, and AngelCon already has more than a dozen companies signed up. The Carlsen Center is hosting a boot camp meeting Wednesday at Sacramento State to offer a crash course to applicants on how to file the application.
The nascent angel investors had to sign on earlier this year, in a program where tuition is paid by the California Office of the Small Business Advocate, which is part of the Governor's Office of Business and Economic Development, or GO-Biz.
The investors in this group will learn by doing, and they will be investing in the company that survives the most rounds of pitch competitions from July through September.
Back in March, organizers were happy to have a pot of about $60,000 in the program’s inaugural year. Interest has been good, however, and the pot has risen to $85,000 in equity investment with an additional $20,000 in non-dilutive money for the chosen company from the Spark Venture Competition the Carlsen Center runs every year to coincide with Global Entrepreneurship Week Sacramento.
NorCal AngelCon is being presented by the Carlsen Center and Rocklin accelerator the Growth Factory. In addition to funding a promising company, the goal of the program is to attract and train new angel investors in the region. The program is following successful models in use at Cal Poly San Luis Obispo and in San Diego, Law said.
AngelCon seeks to activate more early-stage investors. A lack of early and seed-stage investment has been identified as a weakness in Sacramento's startup ecosystem, Law said. By training more angels, it's anticipated that it will create more access to seed-stage money for entrepreneurs.
For would-be angels to participate, they must be accredited investors. Under U.S. securities law, investors can qualify as accredited if they have a net worth over $1 million, not including the value of their residence; an annual income of at least $200,000 as an individual or $300,000 with a spouse or partner; if they're a licensed investment professional; or if they're an officer, director or partner in the securities-issuing company. They must also be able to sustain the complete loss of investment.
