Paul Newsom said he personally knows local entrepreneurs with great ideas. But when they can't find the equity or investors to assist them, they leave Aiken in search of a better opportunity.
That is why Newsom, an associate professor of finance at USC Aiken, has partnered with longtime investor Peter Buckley, who spent several years working for JP Morgan, Bank of America and other firms.
The two are pushing an initiative called the CSR Angels. The group would operate as a branch of the South Carolina Angels Network - an affiliation of angel groups in South Carolina and Western North Carolina made up of investors who analyze the best early stage companies from around the region and support them financially.
The South Carolina Angel Network has reviewed more 1,300 opportunities and invested $13,000,000 in 38 companies. The group is based in Greenville, but Newsom and Buckley said there are branches in Spartanburg, Charleston and Asheville, North Carolina.
The two believe the CSRA could form its own branch off the strength of Savannah River National Lab, the Applied Research Center, Georgia Regents University and other entities in the region that they said are interested in partnerships.
"Generally speaking, technology-based investments are preferred because of intellectual property rights and strong management teams already in place," Buckley said.
Buckley added that they would like to have a team of at least 20 accredited investors to start the group. Accredited investors are those with a net worth of more than $1 million, or an annual income of $200,000 per individual and $300,000 per couple.
Once that pool of investors is secured, entrepreneurs pitch their ideas to the group's due diligence committee, which filters out the strong opportunities from the lesser ones. Investors can then decide if the pitch is worth making an investment and equity deals are made between entrepreneurs and the individual investors who want to participate.
"Our angel investors will only see the opportunities that our managing directors think have the highest probability of success," Newsom said.
Buckley said investments are generally between $150,000 and $1 million at pre-money valuations of $1 to 5 million for a business with a 15 to 40 percent ownership interest.
Buckley said more than half of investments will not return the amount invested, making it a "high risk, hit reward venture." However, returns on a few investments will be sufficient to provide on average, an overall rate of return of more than 20 percent on a due diligenced, investment portfolio, Buckley said.
The two will be presenting to the Aiken Rotary Club today and will also be hosting a meeting at the Aiken Chamber at tonight. Will Williams, president & CEO of the Economic Development Partnership, said the program would be beneficial to turn local ideas into a reality.
"Angel investing has been a missing piece of the puzzle in a broader spectrum of economic development," Williams said. "Having a program like this in our community is critical to developing an entrepreneurial base in Aiken County."
The South Carolina Angel Newtwork has reviewed more 1,300 opportunities and invested $13,000,000 in 38 companies.
Derrek Asberry is the SRS beat reporter with the Aiken Standard. He joined the paper in June 2013. He is originally from Vidalia, Ga., and a graduate of Georgia Southern University. Follow him on Twitter @DerrekAsberry.
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