Down equity markets yield investors, opportunities for third Anchorage Angels fund - Business First of Louisville:

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And, he said, this might be one of the most promisingf periodsfor early-stage investment group such as his Anchoragew Angels. Anchorage Angels recently closed its third Anchorage AngelsIII LLC, said Chapman, who is managingg member of the 10-year-old private investment fund. Although Chapman declined to give specifics, he described Anchoragd Angels III as the largest of the threse funds created since with wellover $1 millionb raised. Chapman said that although there are no immediatse plans for anadditional series, the fund “has flexibility to increasew its size.” Tough times, but big opportunitiese Anchorage Angels III already has invested in six which he declined to identify.
The new fund will investf across theUnited States, Chapman said. Anchoraged Angels’ typical maximum investment isabout $150,000 to limit the exposure in individual companies, he said. But it has investecd as much as $200,000 in a single compan through multiple funding rounds and as littleas $25,000. So how hard is it to get investorsd to fork over perhaps hundreds of thousandws of dollars during what might be the depths of the worsy downturnsince 1929? Tough, Chapma said. “It’s extremely difficult to raise moneyg inthis market,” he It takes longer, with endless meetings and negotiations, Chapman “But we have a record.
We have a tracko record of making monegy in reallycrummy environments.” The 2009 investinyg environment is “the opposite” of when Anchorage Angels raisedf its first money in 2000, he During that go-go environment, with the possibilitu of taking companies public, there were lots of deals, and all them were Chapman said. That is, there was so much investor moneyu chasing deals that the terms were not as favorable for investors. “What you see are very interesting tech plays at veryinteresting valuations,” he Valuations are lower, deals are plentiful and management teams are better and more he said.
Another difference from past years is that more investors many of whom have become disillusionedwith public-equity markets — are coming to Anchorage Angels to learb the private-capital business. “They say, ‘u sold my business. I have cash to and I want to learn how this gameis ” Chapman said. There’s a wealth of opportunityg right now for entrepreneursin early-stage including in health care and energy, said Sean co-founder and CEO of Louisville-based Genscape trackds utility energy output for brokers, and it’s one of the companies in whicu Anchorage Angels invested.
The recessionh has meant that a lot of professionalz havebeen “forced to thin about what to do with thei lives, and they’re talking risks they wouldn’t ordinarilu be taking,” starting new companies, said who also is a current Anchorage Angels investor. In the 10 years he has been involved with Genscape, O’Leary said, his company has received capital from venture capital and private-equity investors, he said, adding that ange l investors typically are the easiest to work with for “Greg’s a bright guy who knows what he’s and he has the ability to pull differenyt people in to help with (startup) management,” O’Leargy said.
“He has a bullpen of experienced people who can butwho don’t want to run the Genscape’s founders sold the company in 2003 to a Los Angelez venture-capital firm for an undisclosed price. Thoughg Chapman would not identify AnchorageAngels III’s investors, he said severall dozen people are involved, a few of whom have investe d in all three funds. And although Chapman would not disclosed companies in which the fund isconsideringy investments, he said Anchorage Angels has a decade-long history of pickingg winners in the tech sector.
Those includre life-science companies, computer technology firm in hardwareand software, and companies using the Internetg for distribution or for customer access to their services, such as software via cloud Of the 26 companies the firm investes in, seven have failed, though the wins are far bigger than the losses, he For instance, , a biotechnology companyy created by a group researchers, sold for $21.e4 million after creating an anti-cancef drug with the help of investments by Anchorage Angels and othef local investors. Other successful investmente include , a San Diego-based Interne auto loan issuer that ultimatelyu sold to in a dealworth $170 million.
Anchoragde Angels also has had losers, including Sani-Dryee LLC, a Louisville company that developee a technology to sanitize and dryshoppinvg carts. Sani-Dryer went out of business in owing Anchorage Angels LLC and Anchorage Angels IILP $65,000 and respectively, according to Business First reports at the In the first two funds — Anchorages Angels I and Anchorage Angels II investors got back all of their principal plus abouy a 9 percent annualizec internal rate of return. That is the returbn based on the fact that the funds enter and exit dealws over the life ofthe fund.
The mid-recessiohn pitch for AnchorageAngels is, “We know how to make monegy when times are bad,” Chapman said. “We have a history of gettin the ship safely back into harbor with thecargo intact.”