By LAURA LOREK
Publisher of Silicon Hills News
“A group of local investors, visionaries, entrepreneurs got together and hatched the idea that San Antonio really needed an angel network to help with all the growth we are experiencing in our startup ecosystem and beyond,” said Chris Burney, executive director of the San Antonio Angel Network.
Previously, Burney worked as a manager and senior financial analyst for Rackspace, the San Antonio-based Web hosting company.
As the head of the San Antonio Angel Network, Burney evaluates deals, recruits new members and runs the organization, which is based in the RealCo Seed Fund Program offices at Geekdom in downtown San Antonio.
On this episode of Ideas to Invoices, Burney discusses angel investing in San Antonio and the details of the deals the San Antonio Angel Network looks for when evaluating a startup.
The San Antonio Angel Network’s 75 members consist of accredited investors or wealthy individuals, ranging from large family offices, successful entrepreneurs, business owners, doctors, accountants, and lawyers.
“The diversity of our network is one of its strengths,” Burney said.
The San Antonio Angel Network, a nonprofit organization, is still accepting members but plans to cap membership at 100. Individual members pay $1,800 and corporate members pay $2,500 a year.
“Those dues just really help us be sustainable,” he said.
The San Antonio Angel Network uses a pooled investment vehicle that allows angels to invest a smaller amount in lots of deals, Burney said. That allows them to write checks in a startup for as low as $5,000, he said.
“Angel deals are inherently risky even with the best due diligence and best entrepreneurs,” he said. “We expect a high rate of failure. But we also expect a high rate of return for our investors.”
Every six to eight weeks, the San Antonio Angel Network hosts pitch events with two or three startups pitching to investors. Entrepreneurs can apply directly on the San Antonio Angel Network website. It reviews applications on a rolling basis and it doesn’t require a fee to apply, Burnet said.
“We have no geographic limitations on the companies we will fund, or invest in,” Burnet said.
The San Antonio Angel Network has invested in three San Antonio startups and one in Austin so far. Its first deal was in HelpSocial, a social media software systems startup spun out of Rackspace and founded by Matt Wilbanks. The second investment was in Parlevel Systems, which is inventing new vending machine technology, and the third one was Dauber, a dump truck logistics, and technology company. And its Austin investment is Localeur, based in Austin, which is an app that provides recommendations from locals headed up by Joah Spearman.
“Almost every major city with a thriving startup ecosystem in the state has an angel network helping support the entrepreneurs,” Burney said. “San Antonio did not have that until we came around. We know for a fact that we were missing deals and that companies were either not getting funding or moving elsewhere because of the lack of investment resources here.”
The San Antonio Angel Network is part of the Alliance of Texas Angel Networks, comprised of 13 angel groups across Texas. Last May at the Hotel Emma at the Pearl, the San Antonio Angel Network hosted the annual summit of the Alliance of Texas Angel Networks with more than 100 investors from all the groups to discuss best practices and angel investing across the state.
The San Antonio Angel Network tries to be a very friendly entrepreneurial network, Burney said. It tries to get the application and due diligence process down to weeks, instead of months and to get the entrepreneurs that meet its criteria in front of its investors as quickly as possible, he said.
The San Antonio Angel Network will look at any deal with a scalable business model that will provide a good return to its investors, Burney said.
For more on the San Antonio Angel Network, listen to the entire podcast and please subscribe, rate and review Ideas to Invoices on iTunes. And support the podcast on Patreon for exclusive content only available to subscribers.