Trading Capital for Equity
Article originally posted here by Dayton Business Journal
by Jacob Fisher with The Beyond Angel Network
The entrepreneurial arm of Greater Dayton's second-largest private university is betting big on startups.
The Beyond Angel Network, the capital component of Cedarville University's entrepreneurship ecosystem, recently invested more than $800,000 in exchange for equity interest in two startup companies: KiwiTech and Soteria Battery Innovation Group.
KiwiTech, an IT services and investment company, develops software for startups in exchange for cash and equity. Soteria, a technology development and licensing company, develops material architecture to improve the safety of lithium-ion batteries.
It's the first-ever investment for the angel network, which launched in early 2020 and bills itself as the Midwest hub for faith-driven entrepreneurship and capital investment. Composed of 30 investors, the network invests in early-stage, Christian-led, for-profit companies that have scalable growth, a clear exit strategy and are post-revenue.
Preferred businesses include technology and platform business models, as well as those with a path to profitability of 18 months or less. The network invests in various industry sectors through preferred equity, convertible preferred debt and warrants.
"Our accredited network invests specifically in Christian entrepreneurs who are seeking to grow their businesses and live out their faith in the marketplace," Sarah Jennings, assistant director of the Beyond Angel Network, said in a release.
KiwiTech and Soteria were selected from a pool of 20 startups screened by the network last year. Both were invited to virtually pitch their companies to investors at the network's October 2020 pitch event.
Entrepreneurs interested in pitching to the Beyond Angel Network may apply online. A $100 application fee allows for two attempts at the network's funding cycle.
The next pitch meeting is slated to take place at 9 a.m. on Jan. 29. Other quarterly pitch meetings are scheduled for April 16, July 16 and Oct. 15, 2021.
Augmenting the Beyond Angel Network is the Yellow Jacket Fund 1 — a sidecar fund capped at $5 million that aims to invest in 30 portfolio companies. It's the first in a series of funds, and a new fund is slated to launch every three years.
The Beyond Angel Network is just one component of the university's Beyond program, which plans to launch its newest segment — the Beyond Business Accelerator — in April 2021. Participants will receive scholarships to attend the 15-week virtual and onsite business accelerator, and each will receive a $50,000 investment upon completion of the program.
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"We're helping entrepreneurs launch their businesses and then we're coming up a little bit later and helping them to fund their businesses and continue to grow," Jennings said. "We're doing both sides of the coin."
Founded in 1887, Cedarville University is a private Baptist institution located 25 miles east of Dayton. It is one of the largest colleges in the region with 4,465 enrolled students and more than 600 workers, according to DBJ research.
KiwiTech, an IT services and investment company, develops software for startups in exchange for cash and equity. The business holds more than 250 portfolio companies across 15 industries, and it recently Graphite Financial — a New York-based finance and accounting firm that works with venture capital-backed startups.
Soteria Battery Innovation Group, a technology development and licensing company, develops material architecture to improve the safety of lithium-ion batteries. The company was founded in 2017 and is headquartered in Greenville, South Carolina.