Bob, can you tell us about how Green Angel Energy came about?
The founders of GreenAngel have been angel investors in technology companies for the past 30 years. Normally only accredited investors may make angel investments and we wanted to find a way that non-angels – the vast majority of investors – could gain access to these kinds of deals. So we formed GreenAngel as a public company, invested our own money, and invited the public to participate. We thought it would be a great way for retail investors to gain access to angel-stage deals normally not available to them, but still offer all the liquidity of the public markets. So far so good: in the first year since we started all of our portfolio companies have done “up” rounds and so the value of our portfolio of companies has risen over 50%. We’re projecting that one or more of our investee companies will see an exit within the next 12 months.
Why a strategy of diversification within such a small company?
Diversification is a key aspect of GreenAngel and central to our investment strategy. Over several decades as angel investors, we’ve learned that diversification is the key to superior returns Often-times, inexperienced angel investors will take a “rifle” approach to investment and come up short. By utilizing our experience and access to deal-flow, we’re confident that we’ve chosen a superior first portfolio of companies – and the early returns support our strategy.
It seems your business plan is dependent upon your ability to raise money in the public market. Can you tell our readers how you have addressed this as a public entity?
Every business plan depends on access to capital and so far we’ve had no problem raising funds to support our new investment model. In addition to public funds, GreenAngel also manages private funds that it also invests. The upside to public investors comes when the private fund matures – GreenAngel receives a 20% share of earnings from the fund. An example of such a fund is our recently launched GreenAngel Technology Ventures (VCC) Corp:
You have put together a team with a considerable amount of experience in cleantech. Can you tell us a bit about them and how you see the team interacting with each other?
Our four founders feature over 100 years of angel investing experience between us. Mike Volker and Al Werenko are engineers who successfully launched and exited Volker Craig in the 1970s. Ever since their exit they’ve been active angel investors. Mike was named “Canadian Angel Investor of the Year” in 2009 by Canada’s National Angel Organization. Mike has invested in hundreds of start-ups, including one he co-founded, Plutonic Power, one of Canada’s most promising alternative energy producers. Al is based in Kelowna where he monitors deal-flow outside Vancouver and teaches entrepreneurship at the local college. A third founder, Bruce Schmidt, has been an active life science angel and entrepreneur and has decades of public company governance experience. My own background started with commercialization of the V-Chip technology out of Simon Fraser University in the late 1990s. In addition to GreenAngel, I’m also active as Executive Director of New Ventures BC which meshes well with GreenAngel since it gives us a privileged first look at all the best new green technology start-ups coming out of BC.
Which of the technologies Green Angel has acquired has the ability to deliver revenue to your bottom line quickest?
GreenAngel, as an investment company, reports earnings based on the appreciation of the assets it owns. So when the value of our investee companies rises, we report earnings. All of our six investee companies have appreciated in value since we first invested and we expect this to continue moving forward.