Early-stage companies working on energy-related technologies may soon experience a surge of seed funding from a new industry-focused angel group. Northwest Energy Angel Group, a regional angel investor group, is aiming to provide the financial fuel to get these new power ventures up and running.
The Northwest Energy Angel Group got its start from mindshare among two Washington Technology Center programs: the WTC Angel Network and the Northwest Energy Technology Collaborative (NWETC). There was a strong interest from Angel Network investors to explore industry-specific angel groups. At the same time, energy entrepreneurs working with the NWETC expressed a need for easier access to seed capital. The result was Northwest Energy Angels –- a cross-border, regional investment group that focuses on energy-related ventures.
Martin Tobias, a partner with Ignition Corp., a Northwest-based venture capital firm, and president of Seattle Biodiesel, is a founding member and was instrumental in getting the group formed. “Energy efficiency and new sources of power are some of the most critical needs facing the world today. Innovation in these areas is especially strong in the northwest,” notes Tobias. “The region has entrepreneurs and researchers working in this space, and passionate, knowledgeable investors and supporters that can help young companies grow. An energy-focused investment group is a natural next step to moving this forward,” adds Tobias.
Industry-specific angel investing is attractive on many levels. The investors are like-minded and knowledgeable about the sector and technology. This can go a long way in stimulating deal flow and helping companies get the funding and mentorship needed to penetrate the market.
The Northwest Energy Angel Group has 19 active members and hopes to expand that number by year’s end.
To date, the group has heard proposals from nine energy companies and has funded one company. Another deal is near completion. The group meets six times a year in Seattle, and plans to host additional meetings in locations around the Northwest including Portland and British Columbia. Each meeting will feature three to four companies that have been pre-screened for investment.
Private investors, or “angels,” are critical to the success of start-ups. They are often the first outside financing that early-stage companies receive beyond what they can raise from family or friends. VCs and utilities tend to be later-stage adopters. They are more interested in funding the companies that are further along in their business development. Angel investment is vital for the viability of these next-generation energy ventures. Without this early-stage funding, many of these opportunities would never get off the ground.