The "missing link"
in startup funding is a good source of angel capital - the money
a growth company needs when funds from friends and family have been
exhausted and the company is not ready for venture capital. The
capital at this stage is usually $250,000 to $3,000,000, though
it can be less or, occasionally, more. Traditionally, affluent individuals,
"Angels," have provided this stage capital, but finding
them can be difficult and time consuming.
C-Cap has enlisted the
premier group of local angels, Queen City Angels, as a catalyst
to create a real network for funding the angel capital needs of
growth companies. Queen City Angels is actively expanding its membership,
growing from 7 to over 25 members since 2001. Also, other angel
groups and individual angels can join C-Cap. To learn more about
becoming an angel member, click here.
In addition to money,
entrepreneurs need resources like management
advice and mentoring, low-cost business assistance, and access to
the best professional advisers.
Most of the Angels who
have joined C-Cap are former growth company executives who are engaged
in angel financing because they want to actively mentor new companies.
Often this is as important as the funding. These Angels have obtained
venture capital in the past, and understand what is needed to grow
a company so it will be attractive to venture capital firms and
will be successful in the long term.
C-Cap is also developing
relationships with local university entrepreneurship programs, where
young companies are often assigned to groups of students who provide
free assistance in developing the businesses.
The Cincinnati region
has at least four business incubators where early-stage companies
can matriculate. C-Cap provides introductions and assistance in
locating in the incubators.
Since C-Cap is an initiative
of the Circuit, Greater Cincinnati's information technology association,
it is part of a network of over 200 member companies who are interested
in fostering growth-company successes in this region.
C-Cap conducts boot
camps for entrepreneurs, to give them low-cost assistance in
making their businesses attractive to angel investors, and achieving
C-Cap has also introduce
a new concept - the Angel Investing 101 Program- to show individuals
how to become successful angel investors. Angels will learn the
rules and techniques of successful angel investing, and meet other
Building a community
for angel investing is what C-Cap is all about. Networking events
are held to introduce angels, entrepreneurs and resource providers.
The educational programs and the Circuit's many events also provide
great networking opportunities.
Since The Circuit is
part of Ohio's IT Alliance, it has five sister organizations in
other parts of Ohio with which it shares ideas and resources. C-Cap
actively networks with those organizations so angel groups statewide
can coordinate their efforts.
The Funding Process
Entrepreneurs can submit
executive summaries of their businesses to C-Cap, in the format
set out in the Executive Summary Guidelines. C-Cap distributes conforming
executive summaries to its angel members. Click here
for the Executive Summary Guidelines and Application Form in downloadable
Adobe Acrobat (.pdf) format. If you do not have Adobe Acrobat Reader,
click on the icon:
to download that program.
Once C-Cap's member angels
receive the executive summary, they decide how they want to proceed.
Interested angels will often interact directly with the entrepreneurs.
Selected entrepreneurs are invited to make presentations directly
to the angels as a group. Each angel makes an individual decision
whether to participate in a deal, and how much to invest. There
is no investment fund affiliated with C-Cap
QCA First Fund
Queen City Angels has
created a seed-stage fund, QCA First Fund, to help fledgling companies.
Investments are in the range of $50,000 - $100,000. The QCA First
Fund targets companies that are using technology as a driving force
in their businesses, and that can use the First Fund investment
to reach important milestones in their development that will enable
them to attract additional investment from conventional sources,
such as C-Cap angels. See the QCA First Fund website for more details
and an application form.
Frequently Asked Questions
here to see a list of FAQs we have developed to answer entrepreneurs'