Members of the South Coast Angels Network participated in the recent ’Where is the Money?’ panel put on by the Business Innovation Center at Texas A&M University-Corpus Christi. The two entities work together and with other partners to foster the entrepreneurial ecosystem in the region. Courtesy photo
Business angels are nurturing and investing in new and exciting cutting-edge business ventures in the Coastal Bend. The South Coast Angel Network looks for game-changing products and services when it hears pitches from start-up companies making “Shark Tank”-like presentations six times a year.
“The companies we look at are difference makers,” SCAN chairman Jim Shiner said. “They are disrupters in the space they are in.”
One such company, Merge Labs, makes virtual-reality goggles and other instruments that work with the googles such as 3-D games. The ability to use these games on a mobile phone platform separates the company from other providers of virtual-reality goggles.
The decision to invest in Merge Labs, which was the first company SCAN took on when it started three years ago, has yet to pay off, but investors are patient and hopeful.
“It generally takes five to seven years for things to mature,” Shine said.
He explained that what they hope for with these companies is they grow to a point that a bigger company buys them out for a huge profit, which pays off for everyone involved.
SCAN members typically don’t have much at stake individually, no matter what happens. Members can pick and choose their favorites and invest in as many as they like. Member investments are usually in the $5,000-$25,000 range but have been as high as $75,000. Members are expected to make at least one $5,000 investment a year, but it’s not required.
To become a member, potential investors must have either an income of at least $200,000 a year for the past two years, joint income with a spouse exceeding $300,000 year for the past two years or an individual worth of $1 million or more that does not include the value of a primary residence.
A member-managed group, SCAN has no hired employees. All administrative work is done at the Coastal Bend Business Innovation Center at Texas A&M University-Corpus Christi and paid for by SCAN. Criteria for membership and operation are regulated under Rule 501 of the Security and Exchange Regulations.
SCAN was developed in 2014 by the Innovation Center, which saw a need for the network in South Texas. Angel networks exist in mostly larger communities such as Houston, Dallas and San Antonio, but the growth in Corpus Christi’s economy drove the need for it here. However, businesses supported by SCAN are not just confined to the Coastal Bend; they come to SCAN from across the state.
The Business Innovation Center works as a filter for some of the businesses applying for help.
“What we want to do is empower the economic ecosystem in the region,” said Russell Franques, associate directory of client relations for the Business Innovation Center at TAMU-CC. “We don’t take on businesses that already exist. It has to be new and novel to the region.”
Businesses that apply and are turned down are not turned away.
“We guide them to other small-business development opportunities,” Franques said. “We try to connect them with resources. We want to give everyone an opportunity in the region to optimize success.”
Not all the companies that present to SCAN are from the Innovation Center, but those that are get priority.
One exciting prospect came out of the Texas A&M University System. TAMU developed a molecule that could reverse the effects of stroke, which won support from a number of SCAN members.
“Members were a little bit altruistic on this one,” said Jim Moloney, membership chairman for SCAN. “If it doesn’t work, we have still done good for humanity. If it does — if this company solves the stroke problem — it’s a major game-changer for everyone. That’s what motivated us to put money in it.”
Without help from SCAN, the process could never have been started.
“We are helping make that happen,” he continued.
Anyone who wants to use their resources to make a change for a better world while also possibly making a profit may contact SCAN via a website form at southcoastangelnetwork.com/contact-us or call administrator Chau Hoang at (361) 825-3519. Businesses interested in applying for funds may either contact Hoang or the Business Innovation Center, 10201 South Padre Island Drive, at (361) 825-3539.
