Debrief: Michael Faltischek, LI Angel Network

LIAN Chair Michael Faltischek

HALO EFFECT: Long Island Angel Network chair Michael Faltischek says Long Island needs re-investment, not just investment.

As chairman of the board of the Long Island Angel Network – which has reviewed over 600 financing applications and brokered in excess of $5 million in investments – attorney Michael Faltischek is point man in the local effort to unite entrepreneurs and investors, a mission plainly focused on the Island’s future success and growth. He is earnest and good-humored about this mission, but be careful when you suggest the network has a “tech” focus. We corralled the Ruskin Moscou Faltischek partner by phone last week. In his words:

NATURAL SELECTION: The Long Island Angel Network doesn’t make investments. We vet applicants and put forward opportunities to present to the board of those we think are capable of making a good presentation. The network is a forum for people who are interested in making investments in startups to be able to see which companies are looking for capital, but the network has no money of its own and makes no investments of its own. We’re the go-between. If there’s enough interest, one of our board members will take the lead and do the due diligence on a particular opportunity, then report back to the others, who may be interested in investing. That’s the process.

TECH-NICALITIES: I take a more narrow view of the word “technology.” The Internet, software development … “tech” runs along those lines. I don’t see development of a smart battery as “technology,” per se. That’s product development. It may be technologically advanced, but I don’t know that I’d call it “tech.”

OPEN-MINDED: The stuff we look at, the stuff that gets funded, runs the gamut. We have medical instruments and medical services. We’ve looked at production companies. [Nutritional supplement manufacturer] ThermoLife is a perfect example of an investment made in a product-development company that will bring products to the marketplace. You may call it technology, but I call it an opportunity.

TIME IS OF THE ESSENCE: We’ll look at just about anything other than life sciences and biotech, because they have such a long lead time and the need for constant capital investment. It’s rare that an investment will be made in opportunities like that – it happens, but it’s unusual. Whereas, things like software have a shorter timeline to success. That’s one of the reasons more investment tends to be made in those opportunities.

BOARD CERTIFIED: We have specific criteria for our directors. First, you have to be an accredited investor. You have to sign a nondisclosure agreement based on participation in these meetings. And we try to include a broad range of businesspeople, entrepreneurs, venture capitalists, professionals who have been in the field and angel-investor types. I think it’s a well-balanced board.

MORE THAN MONEY: One of the things we offer to entrepreneurs at this stage is that we have more than just money. Our people are strategists, in the sense that they can guide people who may have nothing more than a good idea on how to commercialize that idea. We’re a support network that can create a business plan and help a company grow. We’re not just a money funnel.

COMING SOON: We’re evaluating some companies that have presented to us. One that’s sparked some interest is called Cluck ’n Moo Burgers, an innovative food product. Joe Scaduto’s company Traverse Biosciences has some early-stage money and is looking for more. And Triglia Technologies, which has a methodology for drying lumber in an expedited fashion, is getting some attention.

INNOVATIVE ISLAND: We’re still at an early stage, compared to other innovation centers like Silicon Valley or Boston. Those are mature markets with many successes, and the people who have been successful have reinvested in those startup economies. While we have had some real successes over the years on Long Island, we have not seen that reinvestment. There’s a lot of money here, a lot of wealth, but it’s not committed to this stage of development.

ALL IN: Success breeds success, but I don’t consider “success” just putting some money in and getting some money back. Success happens when a company continues to grow and prosper and becomes significant in its field, and the investors realize a meaningful gain from their investment. Then, hopefully, they’ll be willing to reinvest in this startup community. That’s what we lack, and that’s the commitment we need.

Interviewed by GREGORY ZELLER

DEBRIEF: Michael Faltischek, LI Angel Network