Today, Ohio TechAngel Funds (OTAF), a Rev1 Ventures managed fund, announced the launch of OTAF V, its fifth fund with $5.1 million in commitments. With this fund, OTAF is focused on continuing to help early-stage companies secure critical, early capital while delivering strategic services that help entrepreneurs build successful companies. And the formula is working – OTAF, which was founded over a decade ago, is one of the largest angel funds in the U.S. with investments in over 50 companies. To date, those companies have raised over $500MM in capital from outside sources and nearly 70 percent of the firms are still active today, with five successful exits.
“Ohio is truly becoming the next hub for innovation and business growth, because the businesses being built here are solving big problems for big markets,” said Tom Walker, president and CEO of Rev1 Ventures. “The difference is that companies here are backed by grassroots support that approaches early-stage businesses in a new way.”
As part of its work with OTAF, Rev1 Ventures provides strategic services and connections to startups in addition to traditional deal structuring and post-investment services.
“Thanks to our alignment with Rev1, we’re seeing very high-quality deal flow. Companies are coming to us with proven concepts, a market need, and a clearer pathway to a sustainable, high-growth business,” said Parker MacDonell, managing director of OTAF. “OTAF’s unique approach to early-stage investing combines Rev1’s strengths with the wisdom of the crowd to help minimize financial risk for investors while maximizing opportunities for growing companies in our region.”
Rev1 was recently named among the Most Active Tech Venture Capital Firms in the US by CB Insights and the #1 VC Investor in the Great Lakes Region since 2012 by PitchBook. Rev1 manages a continuum of investment with support from corporate, community and innovation partners, as well as the Ohio Third Frontier.
Rev1 and OTAF know first-hand that raising initial capital can be a daunting task, which is why the two organizations are peeling back the curtains to provide an inside look at the DNA of OTAF’s angel investors.
“At the end of the day every successful round starts with understanding your audience and what they’re looking for from a potential portfolio,” MacDonell said. “This advice is applicable to any founder, anywhere.”
- DNA of the Investor: Most of OTAF’s angel investors made their money by starting and running their own company, and some also worked in corporate America at some point. OTAF members want to give back to the entrepreneurial community and are motivated by helping others succeed as much as by the potential of a financial return.
- DNA of the Deal: Generally speaking, OTAF invests in companies that are raising one to two million dollars. As a fund, OTAF makes an initial investment of up to $325,000 and helps the company find other investors to fill out the round. OTAF also makes follow-on investments in its most successful portfolio companies.
- DNA of the Company: OTAF is focused on Ohio-based companies that are built around intellectual property in information tech, life sciences, or advanced materials. Because of the partnership with Rev1, OTAF invests exclusively in companies that have built a product, delivered it to the market, and have validated the offering by securing paying customers (but have not yet achieved $1MM in sales). OTAF portfolio companies usually have fewer than 10 employees.
- DNA of the Entrepreneur: Because we’re looking for companies that are thoughtfully developed and proven, most of the entrepreneurs with which OTAF works are not on their first venture. Commonly, these founders have started businesses a couple of times before and have had successes and failures. They are typically in their early thirties or older; a high percentage are Ohio natives.
- DNA of the “Standout”: OTAF is rooting for each entrepreneur and each company to be successful. While there is certainly subjectivity in decision-making—most angel investors will acknowledge that they look for an entrepreneur who is coachable, enthusiastic, hardworking, dedicated, accessible, and inextricably tied to their customers. Those characteristics ensure the highest likelihood for a strong and productive working relationship between the angel investor and founder, a relationship that often spans years.
For more information on local angel investors and funds, entrepreneurs can review the Angel Capital Association website: http://www.angelcapitalassociation.org/.
About Rev1 Ventures
Rev1 is a seed-stage venture development organization that combines investment capital and strategic services to help entrepreneurs build products people want and companies that succeed. Our seasoned, data-driven team delivers early market validation for startups, helping them lay the foundation for scalable growth with the skills to evolve their product, sell to customers, and build the right team. Rev1 manages a continuum of investment support from corporate, community, and innovation partners, as well as the Ohio Third Frontier. For more information, visit http://www.rev1ventures.com.
About Ohio TechAngel Funds
Ohio TechAngel Funds (OTAF) is a group of for-profit investor funds, managed by Rev1 Ventures, that invest in highly promising, Ohio-based C corporations in IT, advanced materials, and life sciences. More than 300 high net worth, accredited investors have joined one or more of the funds, making OTAF one of the largest in the United States. Since 2004, OTAF’s four funds have invested more than $14MM in 51 Ohio-based technology startups and its members have invested another $15MM in these same companies for a total of $29MM of capital. For more information, visit https://www.rev1ventures.com/investments/techangel-fund/