When it comes to raising capital there is now, like never before, a heightened sense of urgency in underserved communities. This is where the mission of The National Minority Angel Network fits in. Based in New York City, the organization focuses on two primary goals: investing in high-growth, minority-led start-ups and building a national network of high net worth angel investors who share a passion and desire to broaden their aspects for wealth creation by investing in minority companies.
NMAN facilitates investments, creates educational programs and events for entrepreneurs and investors, solicits deal flow through proprietary channels and networks, and provides mentorship and services that facilitate investments. The group is also working closely with The Bill and Melinda Gates Foundation US Program to educate its members about how to attract early stage investment opportunities in the rapidly changing public education market.
As the founder of NMAN, Timothy Reese is dedicated to building a funding model that will help minority entrepreneurs understand what is required of them before they seek financial resources from angel and venture capital investors; thereby increasing the likelihood that they will receive funding.
“NMAN looks inward to find the best and brightest entrepreneurs in America who haven’t the economic means to become the next great company,†says Reese, who started the company with help from the Minority Business Development Agency and the National Community Reinvestment Coalition, in May 2012.
Already the organization is making great strides. Initially, Reese only expected to average seven members in 2012 and anticipated that it would take 18 months before they invested in their first company. But since its inception, NMAN has recruited 40 members who have invested $500,000 for a seed round in Bownce, LLC, a social media platform that addresses the compliance and recruiting issues associated with NCAA college coaches and high school athletes.
The Entrepreneurial Growth and Wealth Creation Symposium, which will be held Thursday, December 13, is the organization’s first public endeavor to educate entrepreneurs about what they will need to make their companies more fundable. The Symposium will have three primary tracks including sessions on finance, legal, and market opportunities. BlackEnterprise.com caught up with Reese ahead of the symposium to learn inspiration for starting the organization, what NMAN hopes to accomplish with this first event, and what plans they have for the future.
What inspired you to start NMAN?
The inspiration of staring NMAN came from my traveling with the White House as part of an economic summit in the summer of 2011. The administration officials saw the response I received to my discussion of the Minority Angel Investor Network (MAIN- another organization I founded, which is supported by the Ben Franklin Technology Partners of South Eastern Pennsylvania) and my personal journey as a first time minority entrepreneur and investor. This turned in to a multi-city tour as a national panelist. When done, I decided to focus on a national minority funding model drawn from my own personal experiences. NMAN is supported by multiple streams of income from individual investors and has a greater emphasis on education than MAIN.
Why is this important to you?
I believe there are many talented minorities who have performed well academically or in their careers but who require more knowledge and discipline to raise capital that will allow them to staff, build, and grow their businesses.
Why does early stage capital often elude minority entrepreneurs?
Access to capital is about more than a single person but about a community! Look at what is going on in Silicon Valley. It wasn’t that Google founders Sergey Brin or Larry Page had families who could write a $100,000 check for their startups. It was their relationship to Stanford that gave them access to a community of wealth. For many reasons, predatory or otherwise, there is no real monetary wealth in minority communities. This has created a lack of knowledge, sophistication, and wealth available for entrepreneurs to launch ideas or test their ideas before looking for angel or venture capital funding. We have a long way to go but I hope in the next few years NMAN can become this type of community.
What do you hope the half-day symposium will accomplish?
I’m truly excited about the symposium because we have three primary tracks including finance, legal, and market opportunities.
Each track has three classes more narrowly focused on subjects that I think are relevant and critical for entrepreneurship and wealth creation. Some of the interesting topics include: crowdfunding, a game changing capital source that is controversial to some investors; how to make money from selling or licensing intellectual property; and new opportunities for entrepreneurs and investors in the EdTech market. So each attendee can choose what most benefits them, gain practical knowledge, and make immediate connections.What advice do you have for angel investors who are new to markets within technology and innovation?
I’d encourage them to start with companies that are working in sectors with which they are familiar. It’s OK for them to not understand all the technical aspects of a company’s solution as long as: 1) it is targeting a problem the investor fundamentally understands and 2) they know the solution actually works (or will work). For example, a physician who has done well and wants to invest in tech might not know all the details behind a new medical device but he might deeply understand the health issue creating the demand. And another doctor might not understand the technology behind a new patient-facing app delivered as a SaaS (software as a service) but she will know the pain points in a patient’s daily experience, which that app is meant to address.
Also, if a person feels as though they found an unmet need in a market that is not of their particular expertise, I’d encourage them to spend at a minimum six weeks at 20 hours a week monitoring a business in that space, meeting people, and finding a management team that knows that industry.
Explain why crowdfunding should be an option for new entrepreneurs?
Crowdfunding, in all its varieties, is an unparalleled source of pre-seed and seed capital via reward, donor, equity and debt finance models. It has a real opportunity to apply leverage where all other traditional financial services are failing.
The benefits of crowdfunding can decrease the cost of product development and pre-marketing, while at the same time generate revenues before production, and therefore provide, at best, a positive cash flow from the start. Crowdfunding denotes space for co-creation and the involvement of the end-user in the product definition resulting in a greater pool of innovative ideas, pre-sales, market research and a free word-of-mouth market channel.
What goals does NMAN have for 2013 and beyond?
Going into 2013, we hope to grow to 300 members on our Gust portal where we manage our membership, communicate with members, and apply document management. The portal will allow our members to reside anywhere in the world but still be able to conference in, collaborate, download and share deal flow regardless of their geography. Secondarily, we hope to open one other region based on membership geography. If 10 or more members are located in a similar city or region, we will open a new chapter there.