Fred Humes believes Aiken investors partnering with technology-based groups in the CSRA to provide funding streams for entrepreneurs would satisfy a real need in the area.
Humes, director of the Applied Research Center, attended a presentation Monday hosted by Paul Newsom and Peter Buckley, the organizers of CSR Angels. Newsom is an associate professor of finance at USC Aiken, and Buckley spent 25 years working for JP Morgan, Bank of America and other firms.
The CSR Angels is intended to 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.
Locally, once that pool of investors is secured, entrepreneurs would 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.
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 Aiken-Augusta area should be next because of technological advantages such as the research center.
Humes agreed, stating that even entrepreneurs who don't receive investments could learn a great deal by going through the diligence process to gain approval. He added the research center has various programs that would interest investors and entrepreneurs.
"We have some projects that are going on in glass and ceramics, and eventually, that could be of interest," he said. "But it's still too early in the process to verify anything."
Jumping the hurdles
Monday's presentation was delivered by Charlie Banks, the director of the state's angel network. The state group has reviewed more than 1,300 opportunities and invested $13 million in 38 companies.
Banks said first-year goals for the local branch include information sessions through the summer, a first full meeting in the fall and getting at least 20 members with a target number of 40.
"I think this community has an opportunity to be very strong for entrepreneurs, and if you look around, there's a great deal of wealth on both sides of the river," Banks said.
The group has reached out to the Applied Research Center, Savannah River National Laboratory, or SRNL, and other entities in the Palmetto State. But gaining traction in Georgia is one area that has been a challenge, Buckely said.
Resources in Georgia, such as Georgia Regents University and others, will also be a major key to the group's success, said Buckley.
"That's why our name reflects both sides of the river," Buckley said. "It's a work in progress, and we think our relationship with the angel network will help us build those relationships in Georgia."
David Jameson, president and CEO of the Greater Aiken Chamber of Commerce, added that there are plenty of people in Aiken who can become qualified investors by the Securities and Exchange Commission definition.
The commission states a qualified investor has a net worth of more than $1 million, or an annual income of $200,000 per individual and $300,000 per couple. The challenge, Jameson said, is getting those people to step forward.
"Let's find those people who are doodling with ideas on the dining room table and see how we can help them," Jameson said.
The cocktail napkin
Jameson added Aiken has many qualities that should attract entrepreneurs. He continued by posing questions on the best ways to maximize local resources.
"Could additional emphasis be placed on technology transfer from the SRNL to the private sector? Are there research scientists who already have ideas of products to take to the marketplace and just need angel funding to move it forward?" he said. "The dream story for communities is the entrepreneur who moves from the idea written on a cocktail napkin that ultimately grows to become a worldwide company."
Banks added that the state angel network has plans to work closely with the CSRA branch. 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. If a proven entrepreneur is seeking a larger investment, there are times when the local branch will assist to make the deal happen, Banks said.
"We're passionate about what this could mean for Aiken, and we want people to know that we plan to be a permanent part of this community," Banks said.
Derrek Asberry is the SRS beat reporter for the Aiken Standard and has been with the paper since June 2013. He is originally from Vidalia, Ga., and a graduate of Georgia Southern University.
Follow him on Twitter @DerrekAsberry.