Start-ups finding it easier to get paired with 'angels' UM's Dingman Center joins Investor Network in matchmaking effort

August 21, 1996|By Mark Guidera | Mark Guidera,SUN STAFF

The University of Maryland's Dingman Center for Entrepreneurship and a private investment organization are teaming up to make it easier to match start-up businesses with investors in the Baltimore-Washington region.

The partnership between the Dingman Center, which is part of the university's Business School, and the Private Investor Network, a Bethesda-based investors' group, will merge and streamline the partners' individual programs for matching investors, or "angels," with promising start-up companies.

"This is an inexpensive way to provide another avenue for angels to meet face-to-face with the people behind start-up companies," said John May, executive director for the Private Investor nTC Network, which has 50 members.

An immediate benefit for entrepreneurs: They no longer will have to duplicate their efforts -- and expenses -- in submitting business proposals to the PIN and the Dingman Center, May said.

As a result of the partnership, the Dingman Center has scrapped its Mid-Atlantic Investment Network, a program set up in 1989 to aid entrepreneurs and investment partners. That program, which saw about three successful matches a year out of about 100 start-ups, was not generating as much interest and investment as originallyhoped, said Charles Heller, director of the Dingman Center.

"Quite frankly, we weren't very happy with it," Heller said. "We didn't find it to be very effective."

But the partnership, he said, should improve the track record, generating up to 20 successful matches annually. "I think that's very doable."

Under the partnership arrangement, entrepreneurs seeking seed financing would submit their business plans and financing needs for consideration to the Baltimore-Washington Venture Group, a nonprofit operated by the Dingman Center.

The nonprofit organizes monthly breakfast meetings and other events for entrepreneurs and investors.

A screening committee each month will choose up to three companies and invite their officers to make in-depth presentations at monthly breakfast meetings attended by interested members of the Private Investors Network. Its membership is made up of wealthy families and individuals, corporations and others looking to invest in fledgling companies. PIN members generally are looking to make investments of between $250,000 and $3 million.

The arrangement will not prevent Private Investor Network members from independently seeking out and making investment choices, but with the large number of start-ups looking for seed capital these days it should help harried investors find the proverbial needle in a haystack, organizers said.

"This should be a much more effective way to interest private investors in these companies," Heller said. "We're going to be getting investors in one room and putting our best deals in front of them in face-to-face meetings. It's very pro-active. The way it was being done was too passive."

Companies invited to make presentations will be almost exclusively based in Maryland, Northern Virginia and Washington, D.C., said May and Heller.

The Baltimore-Washington region has emerged in the last several years as a hotbed of activity for high-technology venture activity, particularly in the field of biotechnology, health and communications.

As a result, Heller said, he is anticipating that 90 percent of the companies chosen to make presentations initially will be technology oriented, particularly communications, information systems, computer software and biotechnology.

Investor interest also will play a key role in the selection process.

"Those are the areas that are hot right now with our members," said May. "They are looking for companies with a high yield."

Pub Date: 8/21/96

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