March 29, 2016
FilterEasy, Camras Vision Snag First Deals With Triangle Angel Partners’ Fund Two
TAP closes $4 million fund two, makes initial investments in Raleigh, RTP-based startups
The five-year-old angel group held an initial closing of $2.5 million last September, but demand continued, helping the fund attract more than 75 investors (up from 55 in fund one), two thirds of them new to TAP.
Those men and women hope to share in the success of the Raleigh startup with an online subscription service for air filters and the RTP company with a shunt and other medical devices for treating glaucoma. At least eight other companies will join the TAP portfolio over the next several years.
More funding for local startups is always good, but TAP leaders believe it’s telling that they were able to raise the funds without yet having an exit. TAP I includes high-profile local startups like Windsor Circle and WedPics, which have raised $9.3 million and $14.85 million respectively including some Silicon Valley investors. They are joined by Stealz, Adzerk, Testive, Seal Innovation, Entigral and Physcient, all of which have raised series A or subsequent rounds and are generating revenue.
Former TAP executive committee president Jan Davis (pictured top left) told me last fall that it took 18 months to raise the first $2 million for fund one and only six months of fundraising to secure the initial $2.5 million in fund two. That’s due to an economy that’s continually improving, she admitted, but also TAP’s solid reputation and process. Of 500 applications to fund one (which totaled $2.8 million), TAP invested in nine companies.
“We’ve demonstrated that there is plenty of deal flow and that we are appropriately picky,” said Davis.
Fund two will continue to be focused on Triangle companies, but Davis said TAP would consider a couple deals outside of the Triangle. As with fund one, about 70 percent of deals will be tech, 20 percent health (though not pharma) and 10 percent other. The investors expect to fund 10 to 12 companies and to put more capital into each through subsequent rounds.
As with fund one, no more than 10 percent of the fund’s assets will be tied up in any one portfolio company. But the larger fund size means up to $400,000 could go into a company if 10 make the portfolio. An investment committee makes those decisions, with support and input from the members.
The financial commitment for any TAP member is $50,000 for a single share, with a 20 percent down payment. Some TAP members have multiple shares in the fund. All are accredited investors. TAP sometimes takes board seats—members sit on the boards of Physcient and Seal Innovation—but often are board observers.
Davis finished her term as president at the end of 2015, and longtime angel investor and executive coach John Fahlberg (top right) stepped up. He took the job in timing with the hiring of TAP’s first fund manager, Stephen Clossick. Clossick is well known in the region for managing the fourth of a series of funds raised in the late 90s and early 2000s by a group of angels called the Triangle Investment Group or TIG.
Under his watch, TIG Four invested in ChannelAdvisor, Motricity and SmartPath, all successful exits for investors.
“The exits came later than we expected but the fund ended up being a profitable one, which was a miracle,” says Fahlberg, who was a TIG investor.
As for Clossick’s leadership, Fahlberg says: “He’s very in tune to the entrepreneurial world and knows how to orchestrate angel groups, how to herd the cats.”
Camras Vision, a company based on the research of now deceased ophthalmologist Carl Camras and his daughter Lucinda, had some successes in 2015, winning first prize in the Danville, Va. Big Launch Challenge last spring and then securing an innovation grant from the One North Carolina Small Business Fund. A group of angel funds invested in the company late in 2015. The first products are still in development.
FilterEasy, meanwhile, closed $1.2 million in January and has since expanded distribution to Canada, added new subscription offerings and is in the process of doubling the size of its team.
In an email about the investment, FilterEasy’s chief growth officer Adam Tury wrote: “We’re excited to be part of TAP’s growing portfolio, as we all work together continuously accelerating the Triangle’s already burgeoning entrepreneurial ecosphere.”