“It is sophisticated deal flow, which you don't typically get if you are doing angel investment on your own,” said Michael Kindrat-Pratt, who manages the SeedStep Angels for i2E.
In a typical year, the angel group receives about 100 applications from entrepreneurs. Out of those applications, about 12 get to present in front of the group each year. Since the group was founded, 35 companies have made investor presentations.
SeedStep Angels members have invested in 17 companies totaling $2.69 million since the group was launched.
“We are an active angel network,” Kindrat-Pratt said. “We encourage our investors to make at least one investment each year.”
Hitting a ‘home run'
All 17 companies that received SeedStep Angels investment are still in business, which means each has the opportunity to eventually provide investors with the “home run” of up to 20 times their investment through some type of exit, most likely an acquisition.
Historically, only about one in 10 investments in high-growth startups are home-run deals, although some portfolio companies may return one to two times the dollars invested. Often, angels lose their entire investment in a deal, so they need that one big hit to cover the losing investments.
“You have to kiss a lot of frogs to hit a few princes,” said Rod Whitson, president of Oklahoma City's Bank2 and a SeedStep Angels member.
Whitson has invested in four ventures through the SeedStep Angels, with a fifth investment pending. Most are life science companies, including Selexys Pharmaceuticals, the Oklahoma City company that is developing a promising treatment for sickle cell disease.
Last year, Selexys received venture capital investment of $26 million, with an acquisition by Novartis Pharmaceuticals that could be valued up to $660 million pending successful results from a Phase 2 clinical trial.
That's the home run he is seeking as an angel investor.
Lab gets 300 orders
In the wake of the investment round that included the SeedStep Angels, Moleculera Labs has established a certified laboratory and received 300 orders within the first 60 days to conduct its autism tests.
Now the company is raising a new round of $1.5 million to $2 million that will include angel investors and groups from out of state. Shimasaki points to the SeedStep Angels investment as the trigger for the avalanche of test orders and further investor interest.
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For information on joining SeedStep Angels, contact Michael Kindrat-Pratt at 813-2418 or mpratt@i2E.org.
I was excited to see an Oklahoma group come together and be a part of what we are doing. It's always a pleasure to present business-based opportunities to Oklahoma investors, because the goal for us is to grow and build organically in Oklahoma.”