The Northland Angel Investor Network uses its network structure to screen potential companies and work with those that are selected to increase everyone's odds of success.
Less than three years old, the Northland Angel Investor Network (NAIN) now has programs in place to provide funding for startups and expanding businesses, while reducing risk for investors. Four companies have been funded for a total of $850,000, and two more are in the due diligence process expected to be completed in May. When complete, the funding should exceed $1,000,000.
That’s not to say it’s been easy, explains NAIN Managing Director Dave Palmstein. “We’re making headway,” he recently noted. “But sometimes it feels like three steps forward and two backward.”
A major challenge is the rigorous vetting process NAIN requires for startup companies. Even before applications were accepted, considerable time was spent assembling the network of business leaders and specialists to provide the knowledge and expertise to review potential recipients.
“Collectively, we have a very rigorous process,” Palmstein said. “With the angel group, we take 10 investors that on average will have 20 years of experience or a total of 200 years of experience. Then we have specialists who know the industries we work in. There are very few industries we can’t drill deep into in order to assess risks and potential. As a group, we reduce the risk significantly.”
Although the effort has been painstaking, several positive trends are becoming evident. “The number and quality of the companies that are available to invest in is impressive,” he said. “The opportunities are there for some very good returns.”
That also explains why NAIN is starting to receive national attention from investment groups. “The thoroughness that we go through is attracting major investment funding organizations that want to participate,” Palmstein said. “That’s a real plus.”
The companies being considered tend to be focused around technology, including artificial intelligence and Internet of Things (IoT) devices, software, human and animal health sciences and similar areas. Not all of the applicant companies are in the Northland, but Palmstein noted that priorities are available for investors wanting to emphasize local economic development.
“If someone wants to get involved in growing the Northland, we can certainly do that,” he said.
NAIN will host a dinner meeting at iWerx in North Kansas City on June 12 for potential investors. “It will be specifically for people who have never been involved in investing in localized companies,” Palmstein said. “It’s an opportunity to better understand what this is about. But it’s a no-pressure event primarily an educational opportunity to meet other investors who were at the same place a year ago and are now active participants.”
For further information, visit the NAIN website at northlandinvestors.com or call (816) 468-4989.