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RGV Angel Network set up to fuel economic development

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Posted: Thursday, January 14, 2016 9:57 pm

No one knows how many great ideas die on the vine for lack of capital, but a new coalition of “angel investors” in the Rio Grande Valley aims to make sure more of them flourish.

The RGV Angel Network (RGVAN) was established last fall to help fledgling entrepreneurs develop their ideas for products or services into something commercially viable. It’s affiliated with the Center for Innovation and Commercialization (CIC) of the College of Business and Entrepreneurship of the University of Texas Rio Grande Valley.

So far the network has attracted 17 “qualified investors,” or individuals with at least $1 million in investable resources or household incomes of no less than $300,000.

The investors, who pay $500 in dues to be part of the network, decide whether or how much to invest in potential business opportunities pitched to the group by would-be entrepreneurs in search of development capital. The minimum investment is $5,000. There is no maximum.

UTRGV Business Dean Mark Kroll is president of the network. The two other board members are Carlos Marin, president and CEO of Ambiotech Engineering Group, and Harlingen gastroenterologist Dr. Nolan Perez.

“We won’t necessarily be the permanent officers, but we have to have a board to stand up the 501(c)(6),” Kroll said.

The designation refers to the IRS category for tax-exempt nonprofits such as business leagues, chambers of commerce and boards of trade. RGVAN is also part of the Alliance of Texas Angel Networks (ATAN), which comprises 13 angel networks around the state, including RGVAN.

RGVAN investors may invest in any ATAN-affiliated network project, which also opens the door to investment from outside the Valley to local start-up businesses, Kroll said.

“When we talk about a business, we are not talking about another taqueria on International Boulevard,” he said. “We’re talking about a scalable enterprise that could over time employ 50 or 100 or more people.”

The point is to develop products and services marketable anywhere in order to bring wealth to the Valley, Kroll said.

Investors are under no obligation to invest in a given business project, and projects are closely vetted before being presented to the network, he said.

“We’re not going to put any half-baked ideas in front of this group,” Kroll said. “Their time is valuable.”

Laurie Simmons, executive director of RGVAN, which is also part of the national Angel Capital Association, said it was important to get it right the first time.

“Before we had our first meeting we wanted to make darn sure that we had all our ducks in a row, that we had the resources, that if we were going to do it we were going to do it right,” she said.

Simmons, who also manages the CIC business incubator, which should have a permanent physical home in Weslaco in about a year, said the goal is to build RGVAN’s membership by reaching out to potential investors in the Upper Valley, which really hasn’t been tapped yet. The group wants to have 40 angel investors signed up by 2017, she said. Kroll said he expects the network to have at least that many doing six-figure deals by next year.

RGVAN was patterned on the network closest to the Valley geographically: South Coast Angel Network, affiliated with the Texas A&M Corpus Christi Center for Innovation, which was instrumental in helping RGVAN get on its feet, Kroll said.

RGVAN has invested in one project so far: $65,000 to a small San Marcos firm that has developed better, more environmentally friendly technology for a component of paints and resins.

Seven RGVAN investors signed on, each ponying up less than $10,000 a piece. It was one of three business ideas proposed at a November pitch meeting. The other two ideas had no takers, Kroll said. The CIC incubator, once it’s operational, should generate local investment-worthy projects, he said.

“But we need to have the funding mechanism in place if for no other reason than to give (RGVAN investors) access to the upstate opportunities,” Kroll said. “We can trade deals. We open doors upstate, for upstate money, and there’s more money upstate than there is here, and it’s reciprocal.”

“We’re going to have access to capital for those companies,” Simmons said. “That’s the biggest hurdle. They have a great idea but there’s no capital.”

For more information about RGVAN contact Simmons at laurie.simmons@utrgv.edu.



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