Illustration by Tim Cook
What do angels do after they get their wings?
They keep on giving, especially angels of the financial sort. Beyond the angel stage of financing fledgling entrepreneurs is a group that helps emerging growth businesses get a leg up in the highly competitive world of business and technology.
Richmond’s entrepreneurs are blessed to have several potential financial backers and funds from which to seek help. One such source is Harbert Growth Partners, which invests in emerging companies in the Southeast and Mid-Atlantic states. They have invested in several Richmond-based businesses, including the luxury men’s clothing company Ledbury; the pharmaceutical company Kaleo, which makes products including the Evzio auto-injection device to administer the anti-opioid drug Naloxone; Envera, a health software company; and Agility Healthcare, a healthcare software company that was acquired by GE Healthcare, according to Tom Roberts, a Harbert Growth Partners general partner in its Richmond office.
Roberts is a founding member of Harbert Venture Partners, and has worked with emerging entrepreneurs by providing growth capital to promising startup businesses. He has advised entrepreneurs and corporate executives on operating growth, finance, and exit strategies for more than 20 years.
“We are not actually angel investors,” says Roberts. “We do invest as a fund in high growth potential private companies, but generally those companies have passed the ‘angel’ stage of investment. We categorize ourselves as emerging growth stage investors, which is generally considered a stage or two beyond angel.”
Richmond is at the heart of Harbert’s business focus, and it’s a strong, vibrant community here, according to Roberts.
“We are very bullish on the central Virginia region, as our primary office is based here in Richmond, and we’ve watched the local entrepreneurial market evolve over the last 20-plus years professionally,” he says. “We see greater maturity of entrepreneurs and the more recent development of an earlier stage investor ecosystem (angels, etc.) as positive signs of future momentum.”
As more companies find success, the platform expands for future growth here. “Successful venture-backed companies often create multiple successor companies which helps feed the ecosystem,” he says.
Another source of support for Richmond businesses is New Richmond Ventures (NRV), founded in 2011 by Richmond natives Jim Ukrop, Bob Mooney and Ted Chandler. It’s an early stage growth capital firm that started as an angel investor but moved to funding more mature but still early companies, according to Paul Nolde, director of business development.
Since its inception, NRV has provided local companies with the ingredients that success demands: Counsel, capital and connections.
NRV has invested in 14 companies, including the natural foods business Health Warrior and WealthForge, an online broker-dealer that led metro Richmond in annual revenue growth in 2016, according to Richmond BizSense.
It’s a crucial service to have available in Richmond, says Mathew Dellorso, chief strategy officer and co-founder of WealthForge. Access to capital is fundamental to growth and venture success, he says.
WealthForge was founded in 2009 by Dellorso and another University of Richmond business student, Fred Bryant. Its private placement platform enables customers doing capital raises to present their project to investors, according to Dellorso. He touts the process as something that can be done at the click of a button instead of the traditional mailing back and forth of documents.
WealthForge has worked with about 100 companies and helped generate about $285 million in investments, he says. They’ve worked with a handful of Richmond-based businesses.
“We show these opportunities to others outside the area,” he says.
Another key to success for fledgling businesses is the access to strong academic business programs at Virginia Commonwealth University, The University of Richmond and the University of Virginia in Charlottesville. According to Roberts, the research and innovation that emerges from the universities are “great fodder for entrepreneurship.”
Sometimes they can provide more direct help. Richmond entrepreneurs with a tie to the University of Virginia have a new potential resource on which to draw, Cav Angels, an angel group that launched in 2016. It’s composed of University of Virginia alumni and investors with a strong school affiliation, including students, faculty/staff, parents and others.
“We have invested in three different rounds in our first year of operations,” says Jim Cheng, a board member of Cav Angels and a former secretary of commerce for Virginia. “We carefully screen companies applying for funding, and in addition to a strong connection to the University of Virginia, we look for strong management teams whose products target large markets and have demonstrable traction.”
Cav Angels moves beyond funding by utilizing its ability to provide tremendous value to investments outside of funding, such as providing members with the opportunity to invest in world-class startup opportunities and provide portfolio companies with investors’ connections, experience and knowledge.
