September 3, 2013

Maine Angels succeed when startups get their wings

The group is adding investors and expecting a return soon on the millions in aid to businesses.

By Jessica Hall jhall@pressherald.com
Staff Writer

(Continued from page 1)

click image to enlarge

Ben Polito, president of Pika Energy in Westbrook, holds one of three blades on a personal-size wind turbine. Polito said he appreciates the mentoring he gets from investors.

John Patriquin/2013 file photo

click image to enlarge

Gelato Fiasco co-founder Josh Davis, shown at the company’s flagship shop on Maine Street in Brunswick, has received assistance from Maine Angels investors.

John Ewing/2013 file photo

"An investor wants to put their money in and see the company grow to the point it can be sold or the startup can buy out the early investors. In Silicon Valley or Massachusetts, there's an expectation to sell or go public. In Maine, the entrepreneurs don't want to sell it -- they are much more likely to grow it just to the point to maintain their lifestyle than selling it or flipping it," Colgan said.

'NOT JUST A CHECKBOOK'

Rick Sales of Abierto Networks in Eliot, which received $200,000 from Maine Angels last year, said he benefited from the experience of pitching his ideas and fielding questions from the prospective investors, plus ongoing consultations. Abierto Networks provides digital marketing and high-speed payment technologies for convenience stores.

"It's not just a checkbook. It's a relationship. It's an opportunity to present your plan and strategy -- and to just have that pulpit to talk to them, you get better. They give you solid criticism and feedback," Sales said.

"Maine is not a huge state as far as business people are concerned, so it's also a great conduit to meet a lot of contacts," he said.

In addition to providing funding, Maine Angels also can serve as mentors or advisers for the companies. Regardless of whether they have a mentor on-site a few days a month or not, Maine Angels expects regular reports and updates on business progress.

"There's mentoring and involvement, sometimes on a week-to-week basis, that is critical for new-stage companies," said Ben Polito, president and co-founder of Pika Energy of Westbrook. The company makes and sells home renewable-energy systems that use wind turbines and solar panels.

Polito said Maine Angels is crucial to the development of startups in Maine because it can be difficult for companies in the state to attract investment funds from Boston, New York or Silicon Valley.

"It's important for a local investor group to take a chance on a new entrepreneur. Getting money from Maine Angels helped us get additional outside money, which all helped us make progress towards commercialization," Polito said.

Among the entrepreneurs, there's a varying level of sophistication, Stone said. Maine Angels gets between eight and 15 applications a month. Three to four are selected to come in to give a 10-minute pitch to the investors.

"They get 10 minutes to try to hook us. If entrepreneurs can't figure out what to tell us in that time, then they haven't focused their plan enough," Stone said.

The biggest mistake entrepreneurs can make is to bluff and act like they know an answer during their 10-minute follow-up Q&A with investors, Stone said.

"That means credibility is already damaged and we haven't even started working together yet," Stone said. "I would rather have someone say, 'That's a good question -- let me get back to you on that,' than have someone act like they know something they don't."

Maine Angels looks for growth businesses in a range of industries. The group is "sector agnostic," though it has not fared well with food product investments, Stone said.

"We're not looking for a retail store, coffee shop or restaurant -- that's not us. We need businesses that are scalable but that might be too green to get a bank loan," Stone said.

Three to four Maine Angels investors have to be interested in the startup company, or the group passes.

(Continued on page 3)

Were you interviewed for this story? If so, please fill out our accuracy form

Send question/comment to the editors




Further Discussion

Here at PressHerald.com we value our readers and are committed to growing our community by encouraging you to add to the discussion. To ensure conscientious dialogue we have implemented a strict no-bullying policy. To participate, you must follow our Terms of Use.

Questions about the article? Add them below and we’ll try to answer them or do a follow-up post as soon as we can. Technical problems? Email them to us with an exact description of the problem. Make sure to include:
  • Type of computer or mobile device your are using
  • Exact operating system and browser you are viewing the site on (TIP: You can easily determine your operating system here.)