Big news for Delaware startups: First State Angels launches investor network

Pedro Moore, executive director of Delaware Innovation Fund, believes the concept of the popular show Shark Tank doesn’t have to be limited to celebrities on television.
Because he’s heard a common complaint from budding entrepreneurs that it’s hard to find funding, he’s created First State Angels, which will be a network of Delaware-based angel investors who learn how to invest well and will meet on a monthly basis.
The first meeting will be from 6-8 p.m. May 12 at the Emerging Enterprise Center.
“I hear a lot of people talk about a lack of capital here in our state, and I hear stories about local startups leaving to other states to increase their chances,” Moore said. For example, the Cnverg left Wilmington for Austin last August because the company wasn’t gaining traction here.
“The common thread is everybody is saying they need more venture capital money,” he said. “The reality is we don’t need VCs, we need angels.”
Angel investors, Moore said, will help startups in their early stages progress to the next stage of business, which is when venture capitalists can come into the picture.
To be an accredited investor, the Securities and Exchange Commission mandates that your income exceeds $250,000 or that you have a net worth of more than $1 million. Moore said he’d like to see some of Delaware’s wealthy citizens diversify their portfolios and consider angel investing as a new asset class.
The creation of an angel investment network comes at an interesting time: Just last week, Gov. Jack Markell and the Delaware General Assembly announced they’ll be introducing legislation that allows Delaware residents from any economic background to make equity investments in startups through crowdfunding.
Moore said there’s a better value in angel investors because of their expertise and connections. “Through crowdfunding platforms, you don’t really get that, you just get capital,” he said.
He’s partnering with the New Castle County Chamber of Commerce in launching First State Angels. Bob Chadwick, the Chamber’s executive vice president, said the Chamber was happy to get involved with the effort.
“This fits into the same theme of ‘growing our own,’ supporting entrepreneurs locally and linking entrepreneurs with funding opportunities so we can  grow jobs, companies and paychecks here in Delaware,” Chadwick said. He noted he’s also heard the complaint about a lack of funding in the area and hopes the new network will be a part of the solution.
The May meeting will cover how to properly make an investment in early stage companies, how to manage the deal, and finer details like sourcing deals, performing due diligence, creating term sheets and managing investments in your portfolio. Attendees can register online.