New CHAP Director Seeks Local Angel Investing, More Angels

Ken Roozen, the new executive director of Charleston Angel Partners, has heavenly hopes for the 1/2-year-old investment group.

Roozen, the former executive director of the Medical University of South Carolina's Foundation for Research Development, intends to continue CHAP's mission to find start-up companies worthy of investment. Additionally, he aims to increase CHAP's members-private individuals with enough wealth to help bankroll start-up companies-from 65 to about 250.

"We're anxious to find local investment opportunities," says Roozen, who on July 1 assumed the CHAP directorship from CHAP founder Rick Fenwick.

Of CHAP's five investments, four have been North Carolina companies and one a company in Columbia. However, the Lowcountry's chances for landing a company on CHAP's investment scoreboard are improving. Of the roughly nine companies the angel investment group is screening for possible funding, five are local, says Roozen.

By networking with the Charleston Digital Corridor and with the Charleston Metro Chamber of Commerce's ThinkTEC, CHAP hopes to identify local, investment-worthy start-ups, says Roozen. The rise of the Charleston Digital Corridor, a collection of technology companies, indicates the Lowcountry has become a more fertile location for entrepreneurs, Roozen says. "A majority of the companies we're looking at for presentation are information technology and software companies," Roozen says.

CHAP is interested in start-ups that have a viable business plan, including a strategy for the company to be acquired or to go public with an initial public offering. The start-up also must show management expertise or the willingness to recruit experienced managers. Also, the young company must show the potential to become a $50 million company in three to five years and generate an investment return of 20% to 25%.

CHAP's members are accredited investors, meaning they have a net worth of at least $1 million (including real estate holdings) or an annual income exceeding $200,000, or more than $300,000 if the income is combined with a spouse's. CHAP screens investment-seeking start-ups that want to give presentations to the angel investors. Upstart companies passing muster are invited to give a 20-minute presentation to CHAP. Afterwards, CHAP members vote on whether to invest in the start-up. Those who agree to fund the start-up each invest at least $2,500. Those members who voted against the start-up do not have to invest, Roozen explains.

"If we can grow the organization's membership, more people will be interested in different types of investment," Roozen says. He adds that increasing CHAP membership is an attainable goal because the Lowcountry continues to attract affluent full-time and part-time residents.

Another possibility Roozen has in mind is for CHAP to invite upstart companies not quite mature enough for a formal CHAP presentation to give a short, preliminary presentation so that members can groom the upstart for the formal one. Angel investors get involved with a start-up after the upstart company has used personal and family money to start the business and before venture capitalists get involved.

"We put in high-risk dollars that help start-ups move farther down the business development pipeline," Roozen explains.

Working with angel in-vestors can be as valuable to start-ups as the angel money itself. "It was a positive experience," says Ed Fadel, co-founder of Durham, N.C.-based Bright View Technologies, a rear-projection television screen manufacturer that CHAP, along with three other angel groups, invested a combined total of $2 million 1 1/2 years ago. "You can keep turning to them for advice because they're captains of industry and have a wide network of resources."