May 20, 2002

AngelNet to bring Indiana's angels, companies together

INDIANAPOLIS, Ind. – Indiana businesses seeking capital and individuals looking for investment opportunities may have a better chance of finding each other with a new service called AngelNet Inc.

Indianapolis law firm Leagre Chandler & Millard, and business consulting firm Concord Partners, are launching the free service, which will allow Indiana companies to post executive summaries of their business plans on a Web site for review by an audience of potential investors.

The Web site also will include a database of nearly 300 potential angel investors from around the state. Potential "angels" must first qualify as accredited investors under applicable securities laws. Qualified investors then can enter AngelNet anonymously, review plans that match their interests and communicate directly with other potential investors.

"AngelNet addresses an age-old problem that faces many closely held and high-growth businesses – how to find angel investors," said Bruce Kidd, founder of both Concord Partners and AngelNet. Kidd said he expects the service to generate startup ventures and high-tech deals. He also expects the site to help attract investment funding for buyouts or corporate spin-offs involving well-established companies.

"For example, investors interested in purchasing a successful company may need some outside equity to do it," Kidd said. "Indiana angel investors are said to represent as much as $1 billion in available capital. We just needed an efficient and effective way for companies to tap into a wide network of potential 'angels.'"

AngelNet is partnering with Purdue University's Gateways Program and Rose-Hulman Ventures to provide additional services to both potential investors and investment-seeking companies, including access to university expertise involving particular industries and/or new products. The Purdue Gateway's Program and the Innovation Realization Laboratory at Purdue's Krannert School of Management will administer the AngelNet Web site.

Sam Florance, associate vice provost for Purdue's Office of Engagement, heads the Purdue Gateways Program, which assists high-tech startup businesses at the Purdue Research Park with business plan development, seasoned counsel and direction from market-specific mentors.

"Angel investors can be the lifeblood for startups," Florance said. "Normally, they invest earlier than institutional investors, and they only have fiduciary responsibility to themselves. A lot of things make it more efficient to go to angel investors at this point in a company's development."

AngelNet members will enjoy other benefits, including meetings in which they can network with each other as well as hear from leaders in specific fields. Information on trends, deal terms, tax issues and other data useful to angel investors will appear on the Web site.

A board of directors that is supported by a board of advisers manages AngelNet. Members of the board of directors are prohibited from owning or investing, directly or indirectly, in companies listed on AngelNet. Advisory board members, however, may invest, directly or indirectly, in companies listed on AngelNet, but any interest they ultimately acquire in a listed company must be purchased through arms-length negotiations with the listed company (with no involvement by AngelNet), and they must receive the same treatment as any other investor participating in AngelNet.

AngelNet's directors are Florance, Donald Kuratko and Jim Wheeler. Its advisers are Albert Chen, Rollin Dick, David Doyle, Jim Eifert, Mark Howell, V. William Hunt, Scott Jones and Mickey Maurer.

Membership in AngelNet is limited to investors who satisfy the U.S. Securities and Exchange Commission's definition of an "accredited investor." Under that definition, an accredited investor includes any natural person (U.S. citizen) whose individual net worth, or joint net worth with that person's spouse, exceeds $1 million; or any natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with that person's spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year.

Sources: Bruce Kidd, (317) 808-3125; bkidd@concordpartners.org

Sam Florance, (765) 496-6246; florance@purdue.edu