This document discusses angel investing and VCC's role in administering regional angel funds. It outlines how VCC has financed affordable housing, community development, and provided technical assistance to small businesses. VCC now seeks to provide innovative capital and leadership through angel funds. Angel funds allow for more efficient operations, funding power, and syndicated deals compared to individual angels. VCC will administer funds through the Appalachian Regional Commission to promote economic development. The funds will be capitalized with $1-4 million from accredited investors and will follow formal structures while investment decisions remain with the investor members.

1. Angel Investing and Economic Development
June 2014
Presented to: VCEN 2014 Conference
Yes, Virginia…there is such a
thing!

2. VCC has built its reputation on…
 Financing affordable housing projects
 Funding community development ventures
 Delivering technical assistance to small businesses in underserved
markets
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3. How did we do it?
1. Leveraging government guaranty programs
1. Partnering with private foundations and corporations for grant
funding and capital investment
1. Launching new loan products tailored for VCC’s target markets and
delivering technical assistance for borrower capacity building
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4. VCC’s Vision as we expand our brand
To be the first choice for innovative capital and
collaborative leadership promoting vibrant local
communities and enhanced quality of life.
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5. Innovative capital: What is angel
investing and why angel funds?
 Accredited investors invest growth capital in start-up and early stage
companies in exchange for (most often) an equity percentage and
expected ROI
 After “friends and family”, but before venture/institutional capital
 Individual angels are often successful entrepreneurs themselves
 Angel funds vs. angel networks/groups
 Operational efficiency
 As early stage funding moves upstream, more funding power
 Easier syndication on deals
 “Side-car” investing amplifies impact to small business
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6. Collaborative leadership: VCC as
Administrator of regional angel funds
 Appalachian Regional Commission
 Federal-state partnership promoting economic and community
development across the Appalachian region
 Appalachian Capital Policy and Angel Capital Fund
 RAIN Source Capital
 Contracted by ARC to provide T.A. to VCC
 Industry leader in guiding rural communities through angel fund creation
and capitalization
 Three Phases
 Feasibility and design
 Fundraising
 First Organizational Meeting
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7. Leveraging partners
 Entrepreneurs
 Serial
 In-residence/fledgling
 Angel investors
 Individual
 Corporations/Institutions
 Economic development officials
 Local
 Regional
 Service providers
 Professional (lawyers, accountants, bankers)
 Technical Assistance (SBDC, SCORE, etc.)
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8. Leveraging capital
 Typically $1MM - $4MM in committed capital
 Smaller group of accredited investors (20 - 25)
 More formalized in structure
 Operating agreement
 Code of conduct
 Committees (due diligence, screening, monitoring)
 Administered (vs. managed) by a third party (e.g. VCC)
 All investment decisions are made by the investor members (not fund
administrator), usually majority rules

9. Thank you!
Questions/Comments
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10. Thank you!
Questions/Comments
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