Kim Lavine delivered an “elevator pitch” to a representative from the Grand Angels one day.
A few follow-up e-mails led to a presentation and suddenly Lavine's company, Green Daisy, landed a much needed infusion of cash. Six months later, after receiving some startup capitol and a little business advice, her company has grown by ten times.
“The help they give is unbelievable,” Lavine said.
Originally, Green Daisy manufactured and sold Wuvits – a special pillow filled with grain that can be warmed or frozen. Today, the company is more like a “think tank” that seeds its ideas with other groups. It also makes pajamas, Daisy Bags, and a teddy bear-inspired Wuvit called Sleepy Head Fred. The company's transformation and success is due in large part to the early investment by the Grand Angels, Lavine said.
Green Daisy is just one of seven West Michigan companies that has landed the support of the Grand Angels, a group of 40 investors who devote time, money, and business expertise to promising local entrepreneurs. Established in 2004 by Charles C. Stoddard, former founder and CEO of Grand Bank, and Craig Hall, founder and CEO of Holland-based Lean Logistics Inc., Grand Angels was the first and remains the lone angel investment group in west Michigan.
The group today plays a vital role helping startup companies gain access to the money for ventures that other banks and venture capital investors won't touch.
“(The Grand Angels) is one of the best things that's happened for my business in recent years,” said Lavine, who also authored a book called "Mommy Millionaire," coaching entrepreneurs on, among other things, how to get access to growth capital.
Fueling Innovation
The investors that comprise the Grand Angels target various types of companies. They don’t often fixate on the high-tech companies or businesses that draw the attention of the larger, more mainstream investment groups. In fact, they like promising startups and will consider any type of company that applies.
The investors review ventures with the idea of providing start up funds or getting a business “over the hump,” said John Jackoboice, chairman of the Grand Angels.
In addition to Green Daisy, the group also has invested in such diverse companies as SimpleDine, a Web-based food delivery service; RF Identics, a high-tech firm specializing in data management; and Mock Draft Central, an online fantasy baseball service.
Since its establishment, the Grand Angels have invested more than $3 million in these and other companies, said Vickie Morgan, the group's business manager. "There is a lot of inventors and talent in this area and we want them to stay here,” Morgan said. “We want to keep the creativity and build the future of West Michigan.”
The Angels look for fast growing businesses where the group can get its equity out in five to 10 years, either through an initial public offering of stock or the sale of the company. RF Identics, for example, which manufactures tiny stick-on labels that identify and track products around the world, was sold just 14 months after the Grand Angels invested.
“It was faster than we expected,” said John Jackoboice.
The Angels reasonably expect some companies to be more successful than others but the overall goal for the portfolio is to secure somewhere between a 25 and 30 percent return on the original investment.
Dream it, Do it
Jody Vanderwel, president of the Grand Angels said that, for many investors, the Grand Angels offer a way to give back to the community. In addition to providing financial support, the investors also donate their time and expertise to the various companies, often sitting on executive boards and mentoring entrepreneurs.
For example, David Hathaway, board member of the Grand Angels, mentored Kim Lavine as she launched Green Daisy. An attorney at Miller, Canfield, Paddock, and Stone and former president of the gift company Precious Moments, Hathaway brought considerable expertise to Lavine's venture. Today, Hathaway serves as CEO of Wuvits and Lavine values the on-going relationship she was able to establish with the Angels.
“For many, it’s the love of the start up business,” Vanderwel said. “They are good at it and can help others succeed.”
The overall goal is to give West Michigan entrepreneurs a place to start and grow financially. Venture capital firms, which are far more common, typically invest when the businesses have more capital and do not typically invest less than a couple of million dollars. But the Grand Angels typically makes investments between $250,000 and $2 million. The group regularly provides capital to companies that have grown to the point they are through investments from friends and family.
The Angels "invest when it’s not much more than a dream,” Vanderwel said.
Because the Grand Angels fill a critical investment gap in the region, they are able to remove numerous business obstacles for area entrepreneurs and provide pathways to success with financing, mentoring, and contacts that aspiring business people might not otherwise have access to, Vanderwel said.
In these tough economic times, the group not only strives to generate jobs, retain local talent, and attract more capitol to the area. It's also working to cultivate West Michigan's entrepreneurial spirit and squash the perception that the region is a poor place to pursue a dream or launch a new business. Indeed, the Grand Angels aim to deliver a decidedly more upbeat message.
“Yes, you can even though you’re in West Michigan,” said John Jackoboice. “Yes you can.”
Photographs:
Kim Lavine owner of Green Daisy with some of her products
A "Wuvit" pillow comes in many different styles
John Jackoboice - Chairman of Grand Angels
Jody Vanderwel - President of Grand Angels
Kim Lavine with pieces from Green Daisy's pajama line
Photographs by Brian Kelly - All Rights Reserved