A new angel investor group is forming in D.C. Here are the details.
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Halcyon’s getting into angel investing.
The D.C. nonprofit, which runs an incubator and programs for social entrepreneurs, is putting plans in motion to build its own investor group focused on social impact investments after winning grant money from the U.S. Department of Commerce. A total of $300,000 over three years from the department’s Regional Innovations Strategies Program will support the hires and operations necessary to create the network.
After applying for the federal grant in April, Halcyon is looking to bring a director on board to bring it to fruition and “do the blocking and tackling on a day-to-day basis,” said Ryan Ross, chief innovation officer for Halcyon, which supports startups with a social mission and houses them in its Georgetown digs. The organization’s team is both building a pipeline of startup founders raising capital and engaging investors — people interested in working with early-stage companies, whether they have investing experience or not — to build its cohort.
“There’s still a lot of things to lock down, but I think we already have our eyes on a lot of the relationships and individuals and partnerships to move pretty quickly on this,” Ross said. “We think once we get this engine up and running, it’s going to be a really incredible amount of financial support for these entrepreneurs and really bridge that capital gap in the region.”
Here are the basics:
The grant funding: Will allow Halcyon to hire its group director. It will also support areas like event management, accounting and legal services.
The projection: Within three years, the angel group will have made more than $3.5 million in direct investments. And beyond that direct economic impact, there would be the potential for follow-up funding and other means of support. On an annual basis and beyond those three years, Ross said, Halcyon expects the group to exceed $1 million a year in aggregate investments into seed-stage companies.
The investors: Between 50 and 70 members at the end of three years. “That will ensure that we’re able to have the type of investment activity that we’re projecting,” Ross said.
The entrepreneurs: A diverse group of startup founders running social enterprises — or those tackling social challenges — and not just ventures that have come through the Halcyon incubator.
The timeline: Have the group fully operational by the end of this year or early next year. Then start to have meetings.
“The real hope is that we’re going to have a very tangible way to work toward what I think is one of the most important pivot points for this social enterprise ecosystem here,” Ross said. “If we can get the impact investments capital flowing, if we can bridge the gap between impact investors and entrepreneurs at this stage, I really think that sends a signal — not only across the city but even larger, across the country — that this is the region where you want to build your social enterprise.”
The angel stage is important, he said, because it captures and supports businesses that are ready for funding to accelerate their operations, before the institutional level of investing, where it’s tougher to secure investments, and even more difficult for women and minorities.
That’s why we’re seeing other groups launch locally; Citrine Angels, born earlier this year, is now building up its network to begin making investments. And “we need more groups doing this type of work,” Ross said. “You really do get value by having other people who are adding value into this company, who are all aligned to figure out: How do we help this founder with this great idea really work? How do we help this company grow? And that is, at the end of the day, what good investors are all trying to do.”
Halcyon is meanwhile raising a $6 million fund to invest in its incubator’s fellows and their ventures. Ross declined to comment further on the fund.
The organization reports it has supported 77 companies that, collectively, have raised more than $91 million and created 764 jobs.