‘Angels’ wings fluffing up

Angel investors, or high net-worth
individuals as they’re known, invested
larger amounts in fewer
deals last year, according to the Center
for Venture Research at the University of
New Hampshire.
Total investments nationwide in 2017
were $23.9 billion, an increase of 12.6 percent
over 2016, while the number of entrepreneurial
ventures that received angel
funding — 61,560 — was down 4.4 percent,
according to the center’s data.
The numbers bode well both locally and
nationally for entrepreneurs.
“I think we’re on the right track,” says
Jeffrey Sohl, director of the UNH center.
“This looks like a relatively stable market.”
There are good deals to be had for angels,
although they appear to be paying
slightly more for them, he says. The higher
valuations could reflect more competition
for fewer deals, he says.
While local statistics weren’t broken
out, New York and Boston are “two major
centers of startup activity and angel investing,”
says Sohl.
On Long Island, experts said activity mirrored
the national report’s findings, with
larger amounts invested in fewer deals.
Members of the Long Island Angel Network,
who invest in early-stage companies,
provided more than $5 million in funding
to companies in 2017, slightly higher than
in 2016, estimates LIAN board chairman
Michael Faltischek, a founding partner at
the Ruskin Moscou Faltischek law firm in
Uniondale. Most of those were “follow-on
investments”— meaning investments in
early-stage firms that are further along in
their business models and may have started
producing some revenue.
Yield rate,or percentage of angel investment
opportunities that resulted in an
investment in 2017, up from 19.7% in 2016.
SOURCE: UNHCenter for Venture Research
‘Angels’ wings fluffing up
Investors are spending more to help startups, but good deals are out there
Matt DeMaio recently snagged angel funding for his Condition One Nutrition in Valley Stream, which makes meal replacement bars.
Copyright 2018 Newsday LLC. Adapted with permission.
July 9, 2018
That follows the trend in the national
report’s findings: The percentage of angel
investments in companies in the seed and
startup stage was identical in 2016 and 2017,
at 41 percent, but angels increased their presence
in early-stage investing to 41 percent of
investments, up from 31 percent in 2016.
Faltischek says he is “ambivalent” about
the local investment outlook for 2018, noting
he’d like to see more “quality” opportunities
for seed investment locally in order
to attract more angels. He says he is meeting
with local research institutions and universities
to gauge future opportunities for
commercialization of technologies.
Meanwhile, Neil Kaufman, chairman
of the Long Island Capital Alliance and
managing member of Kaufman & Associates
law firm in Hauppauge, says he’s seen
a good crop of firms presenting at LICA’s
quarterly forums, where companies pitch
to potential investors.
“We’ve seen a high quantity of highquality
local companies at all stages,” he
says, noting LICA has been receiving a
“historically high volume of applicants” to
present at its forums.
Kaufman says he expects 2018 to continue
2017’s trend, with a strong volume of
applicants and activity.
Matt DeMaio, president of Valley
Stream-based Condition One Nutrition,
hopes so.
He presented at LICA’s December forum
and recently snagged angel funds
for his firm, which manufactures meal
replacement bars.
“I’m in discussions for additional funding
from other angel investors I met through
LICA,” he says, noting Kaufman assisted in
structuring and closing the deal.
DeMaio wouldn’t reveal the amount
of funding he received but says it will
be used for working capital, marketing
and sales.
Going forward, Bob Brill, managing
partner of Newlight Management in Jericho,
which manages $100 million in tech
investments, says he thinks 2018 will be a
solid year.
“I think 2017 was a good year for angel
investing and 2018 will probably be better,”
he says, noting better economic conditions
will help fuel that.
Brill, also on the board of LIAN and an
angel investor himself, sees strong interest
in cybersecurity, biotech, medical devices
and financial tech companies.
The key to getting angel funds continues
to be the founding team and what they
bring to the table, as well as the market, he
says, noting those key elements have to be
in place for him to invest.
“Personally I may look at 20 to 30 deals
and only invest in one,” says Brill.
(#SO61818) Copyright 2018 Newsday LLC. Adapted with permission. To subscribe to Newsday, please call 1-800-Newsday or visit us online at Newsday.com.
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Michael L. Faltischek.
Photo Credit: Ruskin Moscou Faltischek P.C.
Top, Matt DeMaio, president of Valley Stream-based Condition One Nutrition, works on cutting and
packaging the bars at Kaltec Food Packaging in Port Jervis. Above, condition One Nutrition bars
ready for packaging at Kaltec Food Packaging in Port Jervis. The Valley Stream-based firm recently
snagged angel funding.

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