What do Broad Street Angels look for when investing?

Well, for starters, they are not heavenly figures.

BSA is a group of angel investors that operates out of the stately Union League of Philadelphia in Center City. The affinity club is made up of over 100 accredited investors — that is, investors who meet certain criteria under securities laws, such as earning an annual salary of at least $200,000, that permit them to invest in private companies — who are also members of the Union League, a private social club.

The group was founded in 2016 with the mission to invest in early-stage startups in the mid-Atlantic region; in the past, that’s included the likes of Philly’s NeuroFlow and Baltimore’s Huntress Labs. Investments are made individually, but the group’s members support each other in assessing companies and doing due diligence. The members have a variety of professional backgrounds, offering expertise in multiple industries.

To learn how BSA’s members are thinking about investing during this economic moment, this reporter spokes five of the group’s members at its annual meeting last week. Here’s what they said.

1. Chris Connolly

Chris Connolly joined BSA in fall 2022. He works in private equity advisory and told Technical.ly he’d been looking to get into investing in a more personal way. He’s been involved in private investing for about two years and has made one, soon to be two, investments: one in a medical device company, one in a lighting manufacturing business.

When considering investing in a company, Connolly said, he looks for a strong founder first.

“If I have faith in them, I think that that’s probably the biggest piece. And at the stage of businesses we’re investing in, they’re not always super profitable or super large,” he said. “So I think it’s really the story — why were they founded? What is the mission? Are they aiming to do good or are they just aiming to make a profit? It’s a mix of the qualitative and quantitative stuff.”

The pandemic did change the way he invests because it proved not all businesses are “pandemic proof.”

“If the founder was able to navigate the pandemic, in my opinion, that’s a huge sign that this thing could be really successful,” Connolly said.

2. Eric Rugart

Rugart is one of the cofounders of the BSA. He wanted to launch the org because he knew many of the members had been offered angel investment opportunities, but didn’t have a group to discuss their ideas about those deals.

“By joining a group, you’re gathering expertise from across a wide range of members, and then their extended networks,” he said.

As a member of BSA, he has invested in over 20 companies in the past five or six years, he said. Before he joined, Rugart had been investing for about 10 years.

Rugart is an entrepreneur himself, having founded a medtech company, and said he is typically drawn to investing in other medtech companies because he understands the industry. However, he tries to branch out and invest in companies in other industries, such as fintech, as well.

The companies coming to BSA are typically very young, so he looks for a strong team in the early stages when considering investing.

“If you have the right team in place, that can read the writing on the wall, can respond to it,” he said. “My successes have come from founding team members who were really extraordinary.”

3. Nancy Cocozza

Cocozza has been in BSA for two years, but has been investing as an angel investor for about 10, dating back to her work in the healthcare industry. After retiring five years ago, Cocozza wanted to stay connected to her industry, and investing took a bigger role in her life.

Cocozza said she tends to lean toward investing in healthcare-related industries, such as biotech or life sciences, because hher experience working in healthcare allows her to see what is needed in the industry and how a company’s success could possibly play out.

“I try to invest in companies [where] I know something about the core industry, and I can make an assessment about whether that solution is something that there’s a big need for in the industry,” she said.

When investing, Cocozza said she first looks for a “great idea,” and second, a strong leader. She said she also wants founders to have idea of what their exit strategy is: “What’s ultimately the end game for a particular company? Are they looking to sort of grow this? Do they want to go public someday? Are they looking at getting to just big enough where they can get a strategic partner to come in and acquire them to take it really big?”

With the pandemic, Cocozza said she’s more cautious about investing than she was before. She does more due diligence, looks for companies that are a bit later-stage and have a more advanced proof of concept, and for founders who can pivot.

4. Lydia Holiat

Holiat has been with BSA for four years. She works in the wealth management industry and said she didn’t get into the investing space until she joined BSA. The organization was where she started educating herself about investing.

She is also the vice chair of the Hispanic Chamber of Commerce in Philadelphia’s board, and said being part of BSA has helped to streamline any opportunities the two groups could have to work together.

Holiat said she hasn’t personally made an active investment yet, but she knows how important a good team is when considering making an investment.

“See what their experiences are and the synergy that they have with them,” she said. “And make sure the house is in order on that aspect. You need good leaders. To me, if there’s no good leadership, then it would be a pass.”

As for the pandemic’s impact, she thinks the way it forced meetings to go virtual has sped up the due diligence processes, and provided more tools to assess companies.

5. Jeff Griffiths

Griffiths was a member the Union League and retired when he joined BSA six years ago. He saw it as an interesting way to give back to the entrepreneurial community.

“New companies are what drive our economy, what drives innovation,” he said. “I had the benefit to work with two startup companies in my career, and I’d like to be able to see other companies share that success.”

He focuses on investing in industries he knows a bit about, such as “technology that is associated with retail, or consumer products.” (He said he learned many years ago that investors should focus on companies in industries they understand.)

Griffiths said wants to learn what growth opportunities there are for a company before investing, and he always looks for a good management team. Sometimes, the team is more important than the product itself.

Sarah Huffman is a 2022-2024 corps member for Report for America, an initiative of The Groundtruth Project that pairs young journalists with local newsrooms. This position is supported by the Lenfest Institute for Journalism.