Angel Investors And Startups Mingle In Milwaukee

Play associated audio

Thirty-five well-dressed men and women are sipping wine and chatting in the lounge of one of Milwaukee's oldest and most exclusive social clubs. A century ago, this is where the city's beer and banking giants mixed and mingled. Tonight's crowd isn't all that different — many of these men and women are worth at least a million dollars. Once a month, they pool their money to invest in high-tech, fast-growth startups. They call themselves the Silicon Pastures Angel Investment Network.

In recent years, dozens of new angel investor groups have formed to finance startup companies that banks and venture capitalists deem too risky in this post-recession era. Today, there are about 350 angel investment groups across the country — 50 of them formed after the recession started in 2008.

Kelly Fitzsimmons is the co-founder of an angel-supported startup. As waiters in white shirts and black ties take drink orders, Fitzsimmons makes her way across the Milwaukee social club's shiny, red tile floor. Over five years, this group of investors has given Fitzsimmons more than $1 million for HarQen, her fourth Milwaukee startup. HarQen is a Web-based service that records voice conversations and allows users to take notes, share photos or slides, and then quickly retrieve key passages once the conversation is over. Right now, it's used mainly for job interviews by staffing companies.

"We text, we email, we tweet," Fitzsimmons says, "and yet when a conversation is vital, we stop texting, and we pick up the phone and we talk."

At least that's what Fitzsimmons hopes we do. Tonight, she's asking Silicon Pastures to open their checkbooks yet again. She says angels have become a lifeline for entrepreneurs who can't get a bank loan or don't have the cash to bootstrap a company on their own.

'The Guts Of The American Experience'

Silicon Pastures is one of more than 20 angel investor groups in Wisconsin. That makes for an awful lot of money in the dairy state, considering you have to be a millionaire to join an angel group.

Tim Keane is director of the Golden Angels, another Milwaukee investor group. He says such groups allow investors to spread the risk and bet on ventures they may know nothing about.

"We had a deal a couple of years ago that was [an] advanced generator of hydroxyl radicals for purifying water," Keane says. "And the guy said that to me, and I thought, 'Hmm, I wouldn't know a hydroxyl radical if it shook my hand.' "

But another member of the group did know about hydroxyl radicals and encouraged fellow investors to pour money into the company. Keane says the group genuinely cares about helping good local companies grow by providing guidance and networking, in addition to cash. He says Golden Angels' investments over seven years have generated thousands of new jobs in Wisconsin.

"All growth in this economy comes from startups; it comes from people forming new companies and new ideas and taking risks," Keane says. "To me, that's the guts of the American experience."

After their latest meeting in Milwaukee, Silicon Pastures investors likely won't put their checkbooks away for long. In a few weeks, entrepreneurs in the field of telemedicine will pitch to the group, hoping for cash to turn their startups into profitable businesses.

Copyright 2012 Milwaukee Public Radio. To see more, visit http://www.wuwm.com/.

NPR

In An Alternate 19th Century London, Sins Are Marked With 'Smoke'

NPR's Audie Cornish speaks with Dan Vyleta about his novel, Smoke. It's set in an alternate 19th century London, where the morally corrupt are marked by a smoke that pours from their bodies.
NPR

The Judgment Of Paris: The Blind Taste Test That Decanted The Wine World

Forty years ago, the top names in French food and wine judged a blind tasting pitting the finest French wines against unknown California bottles. The results revolutionized the wine industry.
NPR

Donald Trump Dredges Up Clinton Scandals Of The '90s

The scandals of the 1990s are back as likely GOP presidential nominee Donald Trump dubs likely Democratic nominee Hillary Clinton an enabler of her husband's extra marital affairs.
NPR

$81 Million Bangladesh Bank Heist Sparks Push For Stepped-Up Cybersecurity

The head of the Society for Worldwide Interbank Financial Telecommunication acknowledged at least two security breaches in addition to February's spectacular theft involving Bangladesh's central bank.

Leave a Comment

Help keep the conversation civil. Please refer to our Terms of Use and Code of Conduct before posting your comments.