The East Valley’s economic development community is launching an effort to boost the number of local investors who will fund cash-starved technology start-ups.
The push isn’t about a lack of investors; the issue is that so many Arizona investors made their fortunes by investing elsewhere, said Micah Miranda, an economic development specialist for Tempe.
“We’ve grown up on real estate here and that’s where a lot of people have done very well,” Miranda said. “They just haven’t had a lot of experience to investing in technology. What we’re aiming to do is educate people on what options may exist.”
Miranda said that after economic development specialists in Tempe, Mesa, Chandler and Gilbert kept hearing about a lack of funding, they banded together to create a series of investment forums this year in each of those communities.
The talks are aimed at generating what’s known as angel investors. These people are generally affluent investors who sometimes finance start-ups to the tune of hundreds of thousands or even millions of dollars.
“Very few people really understand what it means to be an angel investor or how the process works,” Miranda said.
The forums will include investors and economic development specialists. They’ll discuss the basics of investing as well how to assess what can be a risky venture, said Geoff Ossias, a former entrepreneur who is now a corporate attorney at Quarles & Brady.
“There’s risk involved in any investment,” he said. “Part of the process is to emphasize that you need to do very careful diligence in these investments.”
Miranda said local investors are key to having companies form and stay in the Valley, because the investors typically want to live close to the company they’ve sunk so much money into. That has been a big part of why California’s Silicon Valley has been a hub of high-tech start-ups.
Arizona lags in venture capital investment. Nationally, the number of deals per million residents was 11, compared with just three in Arizona.
Ossias said he doesn’t the angel investing push will increase the number of investors, but could broaden the range of fields they support. He and economic development specialists said they want to create a more favorable climate for new companies because of their potential for new employment.
“Most of the net new job growth comes from start-ups,” Ossias said.
The free investor forums are put together by the East Valley cities along with the Arizona Technology Investor Forum, Tallwave and Local First Arizona. The first scheduled event is from 5:30 p.m. to 7 p.m. Jan. 12 at the Tempe Transportation Center, 200 E. 5th St. To register, email EconomicDevelopment@tempe.gov or call (480) 858-2218. The other forums have yet to be scheduled.
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