As a young entrepreneur, Mike Mizesko didn’t have much trouble obtaining capital.
“Chase Manhattan Bank gave me a $1 million line of credit with no personal guarantees — unsecured,” he remembers. “For a bank to do this, they’ve got to have a lot of confidence. Now I was 25 — and it wasn’t because they liked my face.”
It was, he says, because of the initial investors he had rounded up for the company, which, founded in 1984, was at that time on the cutting edge of technology making touch screens for kiosks.
“I had a board of directors that was to die for,” he says, noting it included the founder of Hickory Farms and the head of a division of Saatchi & Saatchi, a worldwide advertising firm. “My lead investor was a guy that taught new venture management and entrepreneurship at my business school.”
Mizesko, who sold the company in 1989, knows many entrepreneurs aren’t so fortunate, so he’s trying to increase their chances of finding the right investors.
As an investment banker with Helston Capital Group in Columbus, Mizesko is president of OhioAngels.com Inc., which is designed to provide an online means for matching private capital with emerging and early stage Ohio businesses.
Angels don’t want to be found, he says, and entrepreneurs don’t always know where to look — or how to decide whether a particular angel will be good for the company.
“It’s very random,” adds Brad Beasecker, CEO of OhioAngels.com and co-founder and president of Helston Capital Group. “For example, if you are a successful entrepreneur in your own right and have a 30- to 40-year history in the plastics industry, the chance you might see an investment opportunity in the industry is very small. [But] that’s where your knowledge and expertise will be most helpful to that entrepreneur.”
“What we’ve done is create a technical infrastructure, a portal, that allows investors to come and learn about investing and learn about various industries and technologies and companies — and allows them to do it anonymously,” Mizesko says.
The initiative was launched this spring as a partnership between Helston and the Ohio Department of Development. Other sponsors, which include accounting, law, venture capital, technology and financial services firms, will provide content to the site to help educate participating investors and entrepreneurs.
Investors begin with a free portal page, which qualifies them online and gives them an ongoing stream of editorial content about private investing, entrepreneurship, events in their community and relevant emerging businesses and technologies. They also have access to unidentified business plan summaries that match their interests.
A full, one-year membership, at $250 for individual investors or $750 for institutional fund investors, gives investors:
- Full access to the detailed business plans — including the names of the entrepreneurial companies.
- The ability to participate in the process of reviewing business plans submitted to OhioAngels.com.
- Access to deal-specific messaging and comments.
Entrepreneurs also can register for a free portal page that includes the editorial content and an eight-week period to build a business plan abstract — with how-tos from OhioAngels.com.
They then can submit the plan, with a $100 fee, for review and possible acceptance by a team of investors registered as full members on the site and site sponsors. Feedback is provided to the entrepreneur.
Plans accepted by the team can be posted to the portal with an additional charge of $650 and an agreement with an affiliated broker-dealer.
“The key is how do we get people who are serious about raising money to participate,” Mizesko says, noting the site is not meant for entrepreneurs who are not in the market to actively seek capital.
Within two weeks of OhioAngels.com’s May 3 launch, 80 entrepreneurial companies and “a few dozen” investors were registered, Mizesko says. More should follow, he says, given that 86 percent of the venture capital raised between 1995 and the middle of 1998 by Ohio entrepreneurs with sales of less than $3 million came from individual accredited investors.
“Part of what came out of [that] study is about $150 million a year is being invested by accredited investors — angels — into private companies in the state,” Mizesko says.
The trick, Mizesko and Beasecker say, is to find the right investor for the right entrepreneur. It’s not just the money entrepreneurs need; it’s also the right person to mentor them and help develop their skills.
“This is not for all accredited investors,” Beasecker says. “It’s for people who take an interest in developing companies.” How to reach: OhioAngels.com, www.ohioangels.com, 262-5568.
Joan Slattery Wall ([email protected]) is an associate editor and statehouse correspondent for SBN.
