The Trenton Times published the following article on July 7, 2013. To read the full article, click here.

Mercer entrepreneurs see surge in angel-level investing

By Nicole Mulvaney/The Times of Trenton 
on July 07, 2013 at 8:00 AM, updated July 07, 2013 at 8:02 AM

Vehicle Technologies makes load-bearing vehicles that can maneuver in almost any direction.

The company’s founders had to do some nimble footwork of their own to survive the recession. They got their start in the depths of the 2008 recession after the president of their former New Jersey-based technology company died and the business came under new management. The entire staff found themselves unemployed after it collapsed under financial pressures.

“Five of the original employees, including me, pooled $30,000 of our personal savings to start the company,” known as Vetex for short, said president Nick Fenelli.

Vetex, whose moveable platforms can carry up to 100,000 pounds of equipment, has generated millions in revenue since it incorporated, Fenelli said, and now they are searching for additional capital to take their company to the next level.

Last month saw them at a West Windsor gathering of entrepreneurs and angel investors, people who invest in development-stage businesses and ideas.

Opportunities for entrepreneurs seeking capital to kick-start businesses appears to be back in vogue with a stronger economy and rising stock market leaving businesspeople hopeful, said Maxine Ballen, president and CEO of the New Jersey Technology Council, an organization dedicated to providing access to financing and potential strategic partners for technology-oriented companies.

“Within the last two years, we’ve seen a surge in angel-level investing,” Ballen said. “People are feeling more comfortable in this kind of investing as the economy grows stronger.”

The Technology Council’s “Reverse Venture Fair” format allowed angel investors to learn about product ideas, collect business cards and network with entrepreneurs.
“It is a nice arrangement for both investors and entrepreneurs,” said Lou Wagman, president of the council. “It’s advantageous for investors to have substantive conversations about whether or not they want to take the next step and invest in new ideas.”

Wagman said 28 percent of all angel investment deals in 2012 were done in the mid-Atlantic and New England regions, more than the Silicon Valley, compared to trends in the past four years.

“Everyone thinks California is where all of this is happening, but the reality is more deals are being done here,” he said. “With respect to the end of 2012, angel investment deals are looking up this year.”

Since the event, Wagman said all of the attendees have follow-up meetings scheduled, a sign that the event was fruitful for many involved.

Einstein’s Alley, one of the Technology Council’s partners in the event, is a nonprofit organization with a mission to foster economic growth in central New Jersey and make the area an ideal destination for technology companies. Executive director Katherine Kish saw the gathering as an opportunity not only for entrepreneurs to discuss capital to launch their ideas and concepts, but also as a means of drawing more investment to the region.

“It is wonderful, because you have individual angels coming to hear presentations by entrepreneurs, and hopefully investing,” she said.

Funders came to be known as angels, Kish said, to mirror the term once coined to describe funders of Broadway plays.

“Angels tend to invest in an earlier phase of the development of a company than venture firms do,” she said, adding that venture firms tend to prefer companies with existing frameworks and track records — factors that can equate to a lower-risk investment. “Angels are people who enjoy the risk.”

BioNJ, an association representing the pharmaceutical industry, hosted its fourth annual international venture capital conference also last month at the Westin Hotel in Plainsboro, which gathered life science executives from biotechnology and pharmaceutical industries, venture capitalists and entrepreneurs from around the world.
Debbie Hart, president and CEO of BioNJ, said the event brought a bigger turnout than last year with 175 attendees and 19 presenting companies.

“There was a lot of energy in the room, which is one way to measure the success,” Hart said. “It takes, on average, a billion dollars — with a ‘B’ — to bring a drug to market, so getting funding is challenging and always will be, but we’re seeing better trends than the last two years, especially in the IPO arena.”

In terms of venture capital firms, David Silverman, managing partner at PricewaterhouseCoopers’ New York Metro Emerging Company Practice, said there has been a reduction in the past five years with less of this type of investing happening in New Jersey. Instead, this level of investing has shifted throughout the metropolitan region into Manhattan and Brooklyn where entrepreneurs are starting businesses in biotech and pharmaceutical industries.

“Venture capitalists tend to invest larger amounts of money in fewer deals whereas angel investors invest a bit less in more deals, making them critical to the success and future of so many companies,” Ballen said.

Mario Casabona, founder and CEO of TechLaunch which provides seed funding, working space, business boot camps, mentors and access to investors, offered his advice to aspiring entrepreneurs at the Technology Council’s event.

“You’ve got to persevere. You’ve got to sustain yourself. The whole thing is patience, perseverance and tenacity,” he said. “There’s a lot of great ideas out there, too, so just make sure you’ve got the best.”

Staff writer David Karas contributed to this report. Contact Nicole Mulvaney at (609) 989-5723 or nmulvaney@njtimes.com.