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VOL. 126 | NO. 20 | Monday, January 31, 2011

Angel Capital Group Launches Memphis Branch

MICHAEL WADDELL | Special to The Daily News

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Nashville-based Angel Capital Group launched its Memphis chapter with last week’s first of a series of monthly meetings to establish an Angel investor network and feature presentations from Angel investor members seeking funding.

“Our goal is to help as many communities like Memphis as we can,” said Angel Capital CEO Rachel Qualls at Thursday’s launch at the Crescent Club. “There’s a void where innovative companies should be in most communities due to a lack of capital. We need a spark in every community to connect these two things, and that’s where we come in.”

The opening of the Memphis branch brings ACG’s total to five, with operations also in Knoxville, Nashville, Jackson, Miss., and Kansas City, Mo.

“There’s a great entrepreneurial spirit here in Memphis,” said Jason Denenberg, ACG director of investor relations. “We want to be a resource and an asset to the Memphis community to build on what is already here. We want to be able to help Memphis companies if it’s a good fit.”

Last week’s meeting featured a presentation from Dick Reeves, the chairman and CEO of InQbio. Reeves is seeking an additional $1.5 million in funding for an automated and sealed version of a petri dish, cell research technology that would prove especially useful for studying diseases of the brain and nervous system. The dish includes small valves and pumps that allow fluids to be circulated through specimens and better replicate the processes of the human body. So far, Reeves has secured $3 million from Angel investors for his project.

“Once a deal is funded here in Memphis, not only will they have Memphis people backing it, but they will have access to a very extensive network of people to help that company,” Qualls said. “So the community gets the best of both worlds.”

Membership fees for Angel investors are $5,000 flat rate per year, and ACG offers a free one-year trial for new members. Angel investors are able to invest in any deal supported by Angel groups across the country. ACG handles all of the legal fees, accounting and portfolio maintenance. Clients are not charged if they do not invest during the trial period.

Advantages for Angel investor members include decreased amount of time it takes to raise money and decreased legal fees for both the investors and entrepreneurs. Members get access to one of the largest groups of extremely wealthy and powerful people who want to help grow ACG’s companies.

“The opportunity in private equity is massive,” Qualls said. “We can fund just about anything, so we are able to come up with some really cool stuff to put our money into.”

ACG’s portfolio includes Optivia Medical, TrakLok Corp., SIGNiX, InQbio, Sun Pro Tec Systems and BugleMe.

ACG partners with Think Big Cos. of Kansas City to provide additional services to start-up companies, to help incubate them and to connect them with resources.

Qualls founded ACG in 2007 in Nashville. She hopes to continue expansion over the next several years, culminating in as many as eight to 10 branches. ACG is eyeing Kentucky for its next branch.

The process of bringing the Angel group to Memphis began when Qualls was contacted by Shelby County Connect LLC, a group of entrepreneurs, civic and business leaders and others working to create a small business-friendly climate in Shelby County.

“We needed a way to seed local businesses and create jobs in Shelby County because banks are not loaning much new money to untested businesses,” said Nita Black, a member of Shelby County Connect’s leadership group. “The Angel investor network provides an access to much-needed capital.”

The newly formed LLC has a Facebook page up and running and is developing a website that will have a soft launch in early March.

“Shelby County Connect is evolving into a private company with a community focus,” said Black, who is also managing partner of MAP Momentum and president of the National Association of Women Business Owners Memphis.

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