If you're an early-stage startup in Baltimore — or even the Greater Washington Area — you know of the Baltimore Angels.
The angel investment group was involved in D.C.-based Legends of Learning's $9 million seed round in April. They've invested in D.C.-based MPOWER Financing, Va.-based cybersecurity company Dark Cubed, Reston, Va.-based Canvas and even Charlottesville, Va.-based Moonlighting. In May, Baltimore Angels reached $8 million invested in regional early-stage companies since inception in 2009 — with a good chunk of that investment coming in the past 2-3 years.
Now, that's not a huge drop in the bucket of Baltimore's investment landscape. In 2017, according to data from the National Venture Capital Association/Pitchbook Venture Monitor, Baltimore metro area companies brought in $465.59 million across 51 deals alone in venture capital funding. But that's venture funding — not angel investing, which can be argued as a healthier measurement of Baltimore's investment scene.
"The investment scene here is still maturing," said Meredith Persico, Baltimore Angels' operations director. "We're finally seeing companies more consistently that are ready for angel investment. Fewer people are applying to us saying 'Hey, we're at the idea stage.'"
That's a big reason why the Baltimore Angels have seen a lot more traction in recent years. In 2009, when serial entrepreneurs Greg Cangialosi and Dave Troy started the group, it was casual. They would sit around in a crowded conference room to hear pitches while everyone split a pizza. Now, Baltimore Angels is a fledging group of about 50 investors who meet routinely once a month to go through pitches and possible investments.
Angel investing is seen as more personal and almost as a stepping stool for some startups to land on before they head straight to long-term venture capital. Investments come straight from the entrepreneur themselves, rather than a managed venture fund of pooled together investments from limited partners. Angels have more autonomy over where exactly their money goes, rather than blindly trusting a venture firm.
"It's less about not having capital in Baltimore and more about having companies that are really ready to have people invest in"
Baltimore Angels' investments usually focus on technology companies, Persico said, but often the investors will look towards the food industry for some notable deals — like cold-pressed juice company Jrink in D.C. Each company usually already has a product on the market, some sort of market validation and is at least one year old.
"What's great about our group is that all of our investors come from different backgrounds," Persico said. "We have people who are experts in healthcare, we have people who are experts in fintech, software, cloud infrastructure — things like that."
"We have a diverse group of interests and that makes it a lot of fun because we get to see a lot of different companies coming through."
The Baltimore Angels are even rolling out their own investment vehicle, so when they make an investment, they can hand the entrepreneur one check from the Baltimore Angels, instead of a pool of checks from each individual investor who is participating.
The timing makes sense: Baltimore Angels is on track to match — and even surpass — last year's total investment amount. As of July, the group has invested about $1 million. In 2016, they invested about $1.6 million in total.
"It's really direct. They're actually getting to know the entrepreneur and taking a bet on the entrepreneur," Persico said.
?Investments ytd just brought us to over $8M invested in regional early stage companies since inception ?️ #dctech #bmoretech pic.twitter.com/1Ps7sCfeOy
— Baltimore Angels (@baltimoreangels) May 16, 2017
And they have a new-ish full-time position. Persico is only the second person who has been the operations director for Baltimore Angels, and she signed on after she started work there as a Venture for America fellow in 2015. Her role is to bolster the group — organize meetings, set up community events, manage investor relations and more. Baltimore Angels also worked with Revolution's "Rise of the Rest" program when they came through the city.
"It's important that we help grow and facilitate the pipeline of companies coming through Baltimore and staying in Baltimore and making sure they have funding and media attention," she said. "It's a cool interdisciplinary role"
In D.C., NextGen Venture Partners was the most notable angel investing group. But back in early 2016, it pivoted into venture capital investments — launching its first fund at $22 million in March. But the Baltimore Angels show no sign of abandoning their angel roots anytime soon.
"We're not a managed fund. That's really exciting for our investors, and it's exciting for the entrepreneurs," Persico said. "I'm sure this viewpoint differs based on the entrepreneur, but they are looking for specific value-add when they are looking at certain angels."
Moving towards the future, Baltimore Angels is just looking to amp up their marketing and branding efforts and continuing to further embed themselves in the Baltimore innovation scene.
"The perception has been that there's not funding in Baltimore, and certainly, there's less funding than there is on the West Coast. But there are angels here — I know, I work for them," Persico said.
"So, it's less about not having capital in Baltimore and more about having companies that are really ready to have people invest in and give them money."
