What are Hawai'i Angels? Hawaii Angels is a nonprofit, incorporated club focused on investing in emerging companies that create innovation, value, employment, and economic growth. The club members are individuals with sufficient financial means that they are considered to be "accredited investors.” Angel investors help provide start up money for new companies, usually in high technology. For Hawaii Angels, most of the start-up companies are Hawaii Qualified High Tech Businesses (QHTB’s) that are eligible for specific Act 221-215 tax credits described below.
Hawai'i Angels is the premier investment network
for seed-level private equity investors in Hawaii to share investment
opportunities, expertise and due diligence. Hawaii Angels
provides a forum for members to review investment presentations and
share opinions about these opportunities. This forum also allows for
networking with professionals of various backgrounds, and exploring new
opportunities in Hawaii.
Hawaii Angels is continuing to expand its membership, geographic reach and deal flow. Hawai'i Angels Oahu site
What is the Hawaii Angels' Vision? Foster an environment to
diversify Hawaii’s economy and create unique
intellectual property. Support and create opportunities for Hawaii
entrepreneurs focused on global, sustainable business models. Reach out
to integrate interest from the U.S. mainland to support Hawaii
initiatives
The state of Hawaii can be a world-class center for
entrepreneurship and venture investing given key, unique attributes
(location, environment, tax code, human capital, etc.) Expand Hawai'i
Angels network to Big Island (and neighbor island) residents for a
statewide, complete network – Allowing high net worth individuals to
invest, support, and participate in the local entrepreneurial economy
in a positive way.
What is the history of Hawai'i Angels? Hawaii Angels was founded as UH Angels by Robert Robinson Ph.D., a
former Harvard Business School professor and nationally recognized
expert on angel investing in February 2002. It attracted high net worth individuals from a variety of professions including chief executives, attorneys, physicians, and scientists, who share an enthusiasm for entrepreneurship. In September 2006, it was incorporated as a non-profit and changed its name to Hawaii Angels. The number of members has grown to nearly 100. Maui and Big Island chapters were founded in 2006.
The Hawaii Angels process is proven
and well-suited to Hawaii's start-up scene. Since its founding in
February 2002, the member angels have invested more than $27 million in
a variety of companies, including Hoku Scientific, Hawaii Biotech and
Hoana Medical.
What does it cost to join Hawai'i Angels? Membership is $1000 per year, which includes the cost of meeting facilities, catering, the administration of the club and other activities. The club organizers are also members and manage the 'Angels on a voluntary basis only. Members of the group can attend any of the meetings, on Oahu, Maui or the Big Island.
What is the membership criteria? Hawaii Angels is exclusively for accredited investors. The criteria for joining are as follows:
1) Must satisfy the Securities and Exchange Commission requirement of a net worth of at least $1 million, or a minimum income of $200,000 in each of the last two years.
2) Must be willing to invest between $50,000 and $100,000 over the next three years.
Why create a Big Island Chapter of Hawai'i Angels; i.e. what are the benefits? We believe that there may be a significant number of active investors on Hawaii Island who:
(a) would like to diversify their investment portfolios,
(b) have an appetite for the risks & rewards of early-stage private equity investments and
(c) value the collaboration & camaraderie of meeting with fellow investors & entrepreneurs.
There is also an added value for the entrepreneurs to potentially
(a) raise their funds more quickly,
(b) raise a higher amount of funds and
(c) build a broader, deeper base of support in Hawaii.
Who is behind the creation of the Big Island Chapter? Byron McCann, an experienced serial entrepreneur, angel investor and venture capitalist, Rob Kildow, Director of Hualalai Resort Real Estate and angel investor and Nick Riznyk, local entrepreneur and former high-tech industry insider. All three have a passion for supporting local start-ups, sustainable business and improving the local economy. They are members of Hawaii Angels and volunteer to organize and manage the club. They work closely with Hawaii Angels leadership on O'ahu.
When and where will Hawai'i Angels – Big Island meet? Hawaii Angels-Big Island generally will meet quarterly. The site of the meetings will be announced; currently meetings are held at the Four Seasons Resort on the Kona Coast.
What is the typical agenda? The afternoon meetings will usually have two to three new presentations by start up companies plus periodic updates from prior presenters. A typical agenda might be:
3:00 – welcome and informal networking
3:20 – intros and quick updates from past presenting companies
3:40 – presentation #1 and Q&A
4:00 - break (Heavy pupus and beverages served)
4:15 – presentation #2 and Q&A
4:35 - presentation #3 and Q&A
4:55 - group discussion of presentations (without presenters)
5:15 – final Q&A with presenters 5:30 - adjourn & additional/optional informal networking.
How are presenting companies selected? Hawaii Angels Executive Board reviews prospective presenters on the fourth Thursday of every month. The two presenters judged to have the best business plans & presentations are then invited to present their deals to Hawaii Angels. The Executive Committee & other Angels assist the entrepreneurs of presenting companies with their business plans, presentations & deals.
Hawaii Angels & its Executive Board are all volunteers; they do not recommend or otherwise endorse the content or validity of presenters or the appropriateness of investing in any given entity. More Info
Who can invest in the presenting companies? Hawaii Angels does not invest as an organization, but its individual members may do so, at their own discretion. There is no requirement for any member of Hawaii Angels to invest in any individual company at any particular point in time. However, Hawaii Angels is looking for active investors with an appetite for (a) appropriate diversification beyond (e.g.) traditional real estate & mutual funds, (b) the risk-reward ratios of private equity investments and (c) helping to grow the quantity & quality of Hawaii Qualified High Technology Businesses.
Again, while there is certainly no minimum requirement, the average Angel invests $25 K to $100 K per deal, for 1-5 deals per year; collectively Hawaii Angels invest $250 K to $1 MM per deal and approximately 4-8 deals per year (for the last 4 years).
How does the follow-up due diligence process work? Each Hawaii Angel is responsible for doing his/her own due diligence (investigation of the deal to be sure that it is appropriate for potential investment). However, since Hawaii Angels are a diverse group of successful people with different backgrounds, those individuals interested in a particular deal typically meet as an informal group to facilitate the process of due diligence. The groups generally identify a point person to “shepherd” the due diligence meeting process and coordinate communications with the relevant entrepreneurs. Due diligence can take anywhere from a couple of weeks to several months, depending on the complexity of the technology, the accessibility of information about the business and the progress of negotiations between the entrepreneurs & the lead investors.
What are Act 221/215 tax credits? Act 221/215 is a Hawaii law under which certain Qualified High-Tech Businesses (QHTB’s) generate state tax credits. Many experts consider this law to give potentially generous credit for Hawaii residents who invest in qualified businesses. Also, these credits have spurred significant high tech investment in the state.
Given the potential value of this for investors in QHTB’s, Hawaii Angels are advised to consult their tax accountant or tax attorney for details.
What is an accredited investor? In order to become of member of UH Angels, you must be an “accredited investor” as defined by the Securities and Exchange Commission. Please review the SEC requirements at the website noted below:
While there are several ways to qualify as an “accredited investor” two of the most common are as follows:
An individual whose individual net worth, or joint net worth with his or her spouse, presently exceeds $1,000,000;
An individual who had an income in excess of $200,000 in each of the two most recent years, or joint income with their spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year.
What are some of the deals that have gained Hawai'i Angels investments? Hawaii Angels have invested in Hoku Scientific (which went public in 2005 by entering the stock market), Hawaii Superferry, Hawaii Biotech, Hoana Medical, Clear Fuels, Nanopoint and many others. Furthermore, the total portfolio of investments includes everything from bio-tech & alternative energy to software & security to television & film deals. Almost all of the companies are based in Hawaii and are Qualified High-Tech Businesses (QHTB’s). Hawai'i Angels investments
What are some of the basic parameters of Angel investing? Early stage investing includes the following: a. “Friends, Family & Fools”: The earliest investors in a start-up venture are often people with a personal connection to the entrepreneurs. In the case of Hawaii QHTB’s, “f/f/f” may be augmented by U.S. Government and Hawaii State grants. lanb.
b. Angel investors & Early-Stage VC’s (venture capital funds): When entrepreneurs require more of “other people’s money” to facilitate better, stronger, quicker growth of their venture, Angels & some VC’s are often the source of the “seed” funding; due diligence tends to be informal or semi-formal (e.g. evidence of a good management team, defendable IP, early customers); UH Angels collectively provide “A-round” (early stage) funding in the range of $500 K to $1 MM – for those ventures that meet the requirements of the individual investors (including appetite for risk versus reward and potential value of Act 221/215 tax credits).
c. Later-Stage VC’s: Ventures that require follow-on, longer-term or larger amounts of cash to support an emerging growth business often must exchange significant equity for the financial support of venture capital firms; due diligence may be more formal; funding at this stage may consist of one or more additional rounds of investment.
d. Liquidity Event: Those ventures that are fortunate enough to survive & thrive may eventually (1) be acquired by another company and/or (2) license their intellectual property to other companies – and/or less frequently (3) enter the stock market by having an initial public offering; any of these outcomes can result in financial return to the investors.
If I would like to attend a Hawai'i Angels-BigIsland meeting – or become a member – whom should I contact?
Please feel free to contact Nick Riznyk via e-mail: nick@hiangels.com. We would be happy to answer any questions that you might have about Hawaii Angels-Hawaii Island.
Big Island - Hawaii Angels Nick Riznyk, Chapter Manager P.O. Box 565 Holualoa, HI 96725
Oahu - Hawaii Angels 900 Fort Street Mall Suite 1800 Honolulu, HI 96813 Phone (808) 447-9372 Fax (808) 546-4325
