CI seed money reaping benefits
By Sean Spence & David Reed
That’s the chasm that inventors must cross after proving the concept of their product or service works, and they need money to run their companies and build their prototypes.
Since 2007, Centennial Investors has invested $1.7 million in eight companies located in Columbia, said Andrew Beverley, president of Landmark Bank and co-founder of the network of equity investors.
Although angel investor networks sometimes specialize in certain industries or in technology-related companies, Centennial has shown itself to be more open-minded while hearing pitches from more than 50 entrepreneurs in the past three years.
“We have a wide variety of companies that have received equity capital, ranging from a university inventor with a technology that detects lameness in horses all the way to a company that targets newcomers in a marketing program,” Beverley said.
MU researchers formed three of the CI-funded companies, but Equinosis, the first to get a financial investment, is the only company in which the university has a formal stake.
Equinosis founder Kevin Keegan, who took a year off to run the company and then returned to his university position, said the company would not have gotten off the ground without Centennial Investors’ support. “We kind of used their monetary support to do some initial work and to apply for grants,” he said.
Beverley said several companies have leveraged investments from Centennial to acquire other funding. So far, the $1.7 million invested through Centennial Investors has helped attract more than $5 million in additional funding, including investments from angels in other communities, loans and grants.
Several of the CI-funded companies are located at the MU Life Science Business Incubator.
Jake Halliday, president and CEO of the Business Incubator, said during a CBT lunch forum on tech transfer that the pattern “is very clear: Centennial Investors invest in investment-ready deals. Rebecca mentioned the Valley of Death. Unfortunately there often is a gap between the excellence in research at the university and a clear customer product that becomes the nucleus of a venture.”
Halliday said at all of the CI-funded companies, “there was a crying need in the marketplace and an appropriate solution being offered as the nucleus of the company — and someone running the company in whom the investors could have confidence that it would move forward.”
Both Beverley and Halliday predicted that the angel investors will see a growing number of investment-ready deals based on MU research.
One reason for that optimism, Halliday said, are programs that match university researchers with MBA students who develop business plans for companies they want to eventually run.
“That matchmaking is one of the most encouraging things I’ve seen in the last three or four years,’ he said.
Centennial was founded in cooperation with the Columbia Chamber of Commerce in conjunction with its 100th anniversary. Chamber President Don Laird continues to be active with the group, but Centennial is a stand-alone organization with 51 dues-paying members. All members are required to be “accredited investors” as defined by the Securities and Exchange Commission, which means having a net worth exceeding $1 million or annual income exceeding $200,000.
Co-founder John Thompson said: “We tell people that they are going to have to invest in eight or 10 deals to see a pay-off, and in the meantime they are going to see and learn a lot of interesting things. I think we’re having a hell of a lot of fun.”