Regional angel investors to focus on start-up businesses

The Northeast Angels, a newly formed Nashua-based angel investor group, will focus on investing in start-up companies in the Nashua-Manchester area, according to Hollis McGuire, who will be the public face of the group.

McGuire, who also heads up the Small Business Development Center based at Rivier College, said she and others discovered a funding gap between venture capital money and bank financing, which she thought a group such as The Northeast Angels could fill.

Angel investing is usually between $250,000 and $1.5 million, while venture capital is usually in amounts of $500,000 to millions, although more commonly several million dollars or more are invested, she said.

Many start-up companies are too small to handle a large influx of venture capital and many banks will not fund small companies that don’t have a lot of collateral in the form of property, pending orders and inventory, she said.

“I also noticed that there wasn’t really a public face for investing in young companies, not like there is in other parts of the state,” McGuire said. “There is a lot of private investment here, but it is under the radar.”

There is already one well known angel investor group in the Nashua, known informally as The Breakfast Club. Its members include Morton Goulder, a Sanders Associates founder, and Dick Morley, known as the father of the programmable controller. They are an informal group with members around the country who pick and choose their investments, but they don’t seek the limelight.

The Northeast Angels’ founders envision having a more public face, McGuire said. The group is now accepting business proposals from companies looking for investors, although they should only contact the group by submitting proposals through its Web site (neastangels.com). Members of the group will evaluate the proposals.

As is the case with many private investors, members for the most part want to remain unnamed, she said. Companies will be invited to make a presentation to the group if there is interest in the proposal, she said.

Ken Steinberg, an entrepreneur who runs two companies — one in Nashua and one in Manchester — is chairman of the group.

“As with most everything in business, there are cycles,” Steinberg said. “This region of New England has been through many rebirths. The decline of Digital Equipment (Company) created an economic boom five years later, giving rise to hundreds of small businesses. The post-Internet bubble economy will do the same. The regrowth is starting, and New England will be in the thick of it. Northeast Angels wants to be part of that rebirth through our investments and our mentoring.”

McGuire hopes the new group will be able to network with other angel groups throughout the state and potentially partner on investments.

“Encouraging and supporting the flow of capital is an important component in a vibrant economy,” said McGuire.

– EILEEN KENNEDY
THE TELEGRAPH