Rhys L. Williams is the president of the New World Angels, which he co-founded in December of 2003. Since 2005, the group of 35 accredited investors has made nine investments in South Florida-based companies, mainly in the tech space. Investments of $500K are made in financing rounds that generally total between $500K and $3MM. The fund also has made nine follow-on investments in some of those companies.
Q. Approximately how many deals do you look at a month and how do companies get considered?
A. We receive anywhere from 15 to 40 business plans in a given month. Our business partner, Enterprise Development Corporation, does the initial scoring on these plans, and then our Screening and Selection Committee reviews the top 12, and then they discuss and debate their relative merits. They will invite six companies to give a “live” screening before our committee, and from this meeting the final two or three will be selected and given the opportunity to present before both chapters [New World Angels chapters are in tri-county South Florida and the Tampa Bay area] at the next monthly dinner meeting. The cycle is continuous, and both our committee members and the EDC folks do a phenomenal job.
Q. Can you give me some examples of a couple of companies you've invested in recently?
A. Late in 2011 we invested in Aplicor Inc., a Boca Raton-based company whose Cloud Suite product offers small and mid-sized companies a true cloud business solution. It integrates customer relationship management (CRM), sales force automation (SFA), customer support, marketing automation, and financial reporting, all within a single web-based, dashboard-rendered solution. The Cloud Suite is easier to use and deploy, more flexible, and most often a better value than larger competitors’ offerings (vs. Salesforce.com & NetSuite) and is winning in head-to-head customer competitions. Tech giant Don McKinney is the Chairman and early angel investor who brought this deal to us, and the company is also ably-coached at the Board level by founding Citrix CEO Roger Roberts & Wayne Huizenga, Jr. CEO Steve Haley and his team are doing an incredible job of doubling accounts every quarter.
In early 2011 we closed an investment in Citrix Co-Founder Ed Iacobucci’s latest venture. VirtualWorks tackles the challenge of “data sprawl” by introducing a new enterprise information architecture, making an enterprise’s information instantly and securely accessible — regardless of what it is, where it lives, or who needs it — through affordable, pre-integrated packaged software. Mr. Iacobucci’s vision and drive are absolutely unmatched in the tech realm; we are very excited about this deal.
The rest of our portfolio includes investments in telemedicine, mobile/web applications, biotechnology (therapeutics), business services, and consumer products (pre-packaged foods).
Q. Have there been any recent trends/changes in investment strategy/operations you'd like to share?
A. Quality: we have seen a significant upgrade in the quality of business plans and the caliber of entrepreneurs and management teams over the past several years. This is very encouraging for us as angel investors, and also for the region as a whole.
Eco-system: The trend that started post-2007 has continued: angels now inhabit the space that venture capital firms (VC’s) once owned, and many local VC’s are behaving more like traditional banks (investing only in expansion stage business that have been substantially de-risked), and banks are behaving like, well, we are still trying to figure that one out.
Innovation: We are seeing breathtaking innovation in many sectors, notably in the life sciences and mobile technologies. Regulatory delays and hurdles for life sciences companies are still a major detriment to attractiveness for angel investors, but we are still very eager to find ventures that have a sound strategy to mitigate these risks.
Crowdfunding: We have not seen much of an impact yet in the manner that capital is raised and deployed, but we are watching this development with great interest.
Q. More broadly, what do you look for in companies you invest in?
A. We look for:* Entrepreneur or management team with deep domain expertise and experience. Successful track record a big plus.
* Reasonable valuation; our investment sweet-spot is for those ventures which value themselves between $2MM and $7MM prior to our investment (“pre-money”), though we will look at firms up to $20MM valuation. We are comfortable with pre-revenue companies, though revenues are always a big plus.
* Modest capital requirements, with no more than one or two subsequent rounds of financing as a desired objective.
* Favorable competitive positioning, meaning the product or service is meaningfully differentiated from its competitors.
* Defensible barriers to entry a plus, which could be a favorable patent estate, or a key, proprietary supplier or distribution partnership, among others.
* Broad, expanding market space, capable of supporting at the end game at least one big winner and two other runners-up. This translates into multiple exit opportunities for the angel-backed company.
* Solid sales & marketing plan, this tending to be the area least understood or most neglected by the entrepreneur.
* Entrepreneurs and prior investors who work well in teams, that are willing to view the New World Angels as partners in their success, able to listen to and process strategic advice, etc.
Q. Anything else you would like to add?
A. We are always eager to receive well-conceived business plans from talented entrepreneurs. We also enjoy meeting other like-minded angel investors who might be interested in joining our group or in co-investing alongside us. It is phenomenal the degree of trust that co-investing with another member engenders. We have members who have gone on to start other business ventures together outside of the New World Angels, or start other investment groups, and even share each others’ avocations (e.g. breeding race horses!). Entrepreneurs seeking funding, accredited investors interested in membership, or larger investors interested in co-investing, may contact the New World Angels via our website at www.newworldangels.com.
I am tremendously blessed to be the head of an organization of such committed, intelligent, successful, and high caliber individuals.