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The new Central Arkansas Angel Network will launch next week, aiming to provide investors and early stage startups a new way to connect.
CAAN will officially begin at 5:30 p.m. Jan. 30 with a reception for accredited investors at the Venture Center in downtown Little Rock.
The mission of the nonprofit is to:
Educate people in central Arkansas about how to make better investments in early stage companies, and
Spur economic development by bringing together investors to capitalize primarily early stage companies with the ability to grow well-paying jobs in the state.
Some of CAAN’s organizers led the Fund for Arkansas’ Future, which encompassed two statewide angel investment funds, for 15 years. CAAN’s director, Jeff Stinson, led that organization as well.
Stinson said he thinks CAAN is the first angel investor network in Arkansas; networks like it can be found nationwide.
Stinson explained that the network will allow members to look at potential investments in Arkansas startups. Each member will decide for themselves what companies to invest in.
That differs from funds, in which members give the fund their investment and a committee decides what companies to invest in. For example, in Fund for Arkansas’ Future, seven committee members made investment decisions for 100 members.
Stinson told Arkansas Business the network will hold member meetings six times a year.
“Every other month, we’ll have a group of companies who present to our members for potential investment,” he said. “If there’s sufficient interest from our members in those companies that present, we’ll then go into a due diligence process with those companies where we learn as much as we can and we write an objective due diligence report … and then we put that out ot our individual members for them to sign up to make investments or not based on their individual interests.”
In addition, the network will host education sessions twice a month on how to make better investment decisions regarding early stage companies. Stinson said those events could include lunch and learns, panel discussions and keynote speakers from across the country.
Stinson said the network will “make it really easy” for people who want to invest in early stage companies, by scouting potential investments, conducting due diligence and handling documentation.
Stinson said one hurdle for early stage companies in Arkansas is lack of capital access. The network aims to remedy that.
“That is our goal for sure, is that we want to take a step in that process of trying to solve that problem, because it is a big problem,” Stinson said. “We hope to make positive steps in that direction and fill that startup capital gap that’s so hard to fill for startups to get their first organized round of investment into their company.
“I think the big opportunity for us with the Central Arkansas Angel Network is we have this opportunity now to expand early stage investing to a whole lot of people who are interested in it but have been reluctant to commit to investing in a fund because, you know, a fund is sort of a leap of faith. Someone else is investing your money.”
CAAN’s first four board members are Jeff Amerine, James Hendren, Bryan Hosto and Alese Stroud.
“Having a vibrant, well organized angel group that will focus on providing early-stage capital to worthy ventures while also delivering best-practice education to accredited investors is absolutely essential for the Arkansas venture scene,” Amerine, founder and managing director of Startup Junkie Consulting in Fayetteville, said in the release. “I’m proud to be part of the newly forming Central Arkansas Angel Network as it fills this gap in the funding continuum.”
Stinson added that many local investors have already expressed an interest in joining the network.