Rochester Angel Network and High Tech Rochester help create high growth in the Finger Lakes region.
Rochester Angel Network (RAN) and High Tech Rochester (HTR) have been working collaboratively for years, along with other angel funds, with the goal of creating economic growth and wealth in the Greater Rochester area.
Tim Wilson, Chairman of RAN and Jim Senall, President of HTR, Co-Founder and Managing Director of RAN, tell us about some of the past and future initiatives launched by the two organizations.
RAN was created in 2005, first as a loose organization with individual investors gathering together and making their own investment decisions, and later evolving into a formalized fund in 2012. As stressed by Tim, “As we went down the path of creating the fund, we got a lot of help from the Syracuse area, particularly from Nasir Ali, as well as from Albany and Buffalo angels who were all very collaborative.”
Today, RAN is believed to be the largest angel group in Upstate New York, with 80 total members, and having invested more than $10M into 30 total companies. 17 of those investments were under the former network model and 13 were investments from the Rochester Angel Fund – with individuals often investing alongside. The Fund, which was $2.3M, is now almost fully invested. “We are agnostic in terms of the market that we invest in,” says Tim.
Indeed, the portfolio is very diverse. Among the recent investments made by RAN are Ultracell Insulation, a cellulosic insulation manufacturer which opened its first plant near Niagara Falls; Vital Vio (Albany area), which makes disinfecting lighting technology targeted at hospital and other medical applications, and iVedix, a Rochester company specializing in data visualization and analytics, and the internet of things. Many of RAN’s investments have other Upstate angels or angel funds as co-investors, which really demonstrates the amount of collaboration among groups.
As RAN gets ready to raise its 2nd fund, the group is also evolving in the way its members interact with their portfolio companies. Mentoring and coaching entrepreneurs continues to become more important, now that there are 13 startups in the fund portfolio. “We have 80 total members of RAN, 67 of which are investors in the Fund, and all of whom are very successful, smart business people from a variety of industries. We can provide some seed funding, but in my opinion, a lot of the real benefit is entrepreneurs tapping into the network that we have and our ability to help them, either through mentoring, opening up doors with customers, or helping to build their strategy,” explains Tim.
RAN, as well as other angel funds in the region, works closely with High Tech Rochester (HTR), which aims at promoting entrepreneurship and innovation in the Greater Rochester area and across New York State. HTR provides startups and also later stage, established companies with services and programs such as business incubation, software accelerators and Clean Tech programs, coaching, mentoring, and CEO roundtables. “One connection point between RAN and HTR is me,” explains Jim, who was actually running RAN prior to becoming President of HTR and who chose to continue to administer RAN. In addition, HTR now also provides back office support for the angel group. The startups coming out of the HTR programs are potential investment opportunities for RAN members and other regional funds.
“Over the last five years, HTR has worked with 548 startups across all sectors, as well as 331 additional already established companies, primarily in manufacturing. That’s 879 clients in total, which is a mind-boggling number to us,” says Jim about HTR.
The future seems even more promising. HTR will be moving into a new facility, the Sibley Building, a 40,000 square feet space located in the center of Rochester. This will establish “a new innovation district downtown.”
“We’re very excited about that,” says Jim. This facility will host an accelerator and technology incubator, prototyping lab, space for events, offices and co-working areas, as well as offices for RAN and other local seed and venture funds. The creation of this hub is expected to generate 1,000 jobs over five years.
Both Jim and Tim stress that the relationship across Upstate NY in the startup space and the angel space is very collaborative. The importance of paying back to the community and helping young entrepreneurs be successful is also critical to both HTR and RAN members.
The most difficult part of being a mentor and investor for Tim is the patience that is needed, a quality he says he lacks. “With the startups, you have to have a long horizon. It can take 10 years for these things to blossom. These companies are going to pivot several times. You have to stick with it.”
To Jim, the hard part of investing at the early stage is figuring out how to identify the potential winners, well before they have demonstrated market traction. “At the end of the day, investors at this stage are betting on the people, and the management teams. Both at RAN and HTR, we always seek to work with the highest potential teams, who are eager to get coaching and mentoring. Those are the ones that usually figure out a way to win.”
Tim Wilson is the former President and CEO of Arnold Magnetic Technologies, and Chairman of the Board of Directors of RAN. He is also a member of Upstate Venture Connect’s UNY50 Leadership Network.
James Senall is President of HTR, Co-Founder and Managing Director of RAN.