Lehigh Valley Economic Development Corp. is looking to enhance its ability to offer investment opportunities to companies by collaborating with the Lehigh Valley Angel Investors Network, a group that provides seed and growth capital to startups.
“This is a starting point,” said John Kingsley, vice president of economic development finance for LVEDC. “We are creating a relationship with Lehigh Valley Angel Investors to identify new members for the organization and we are going to help drive some business to the organization.”
The partnership will help LVEDC with commercial lending and equity investment potential, Kingsley said.
“When we meet with clients, we’ll have the full range of capital access available to offer their projects,” Kingsley said.
Though the initiative has not started, LVEDC is in the process of creating Web and newsletter information about it to highlight the importance of equity investment.
Kingsley said there are synergies LVEDC can bring to what the Angel Investors are trying to accomplish.
“I want to put together an inventory of individuals looking for investment opportunity,” Kingsley said. “This completes the capital access network.”
Stuart Schooley, founding member of the Lehigh Valley Angel Investors Network and co-owner, president of Dutch Springs in Lower Nazareth Township, said the investors group is looking to add members.
“Just as we partnered with Ben Franklin [Technology Partners of Northeast Pennsylvania] we talked to LVEDC about partnering with them,” Schooley said. “We are looking for other investors to join our group.”
Though the partnership with LVEDC has not started, Schooley said he was sure they would come to “a meeting of the minds.” He also said the investors group is looking to partner with other organizations to increase the number of qualified investors in the group.
Through its partnership with Ben Franklin, where the investors group has its monthly meetings at the TechVentures2 building at the Mountaintop Campus of Lehigh University in Bethlehem, the main focus has been investing in startups and technology entrepreneurs.
Schooley said the investors group has re-examined its guidelines and is interested in looking into additional companies to invest in, though at this point, the group is not seeking real estate companies, he said.
“We’re not focusing on one type of industry,” Schooley said. “We are basically looking at anything.”
He said a company must present an investment that has the potential to give Lehigh Valley Angel Investors at least five times a return on its investment.
Many of these businesses have a slim chance of success.
Schooley said investors have to be comfortable knowing that.
“The chances of any one of them succeeding is about one in 10,” Schooley said. “One usually makes it big.”
If the investors back 10 companies, the investors will get their money back from two to six of the companies. With about four of them, investors will not make anything at all, Schooley said.
The Lehigh Valley Angel Investors will stay within a 100-mile radius and wants to help new businesses in the region as well as be a resource for other angel investors groups, Schooley said.