NVille's InCrowd Capital adds Angels + investments, seeks SE partners
Milt Capps updated 6:36 a.m. 15 June 2015
Updated: 15 June 2015 6:36 a.m.- InCrowd filed with SEC for open-ended Healthcare fund-of-funds fund raise here. 17 Nov. 2014 - InCrowd and Global Action Platform announced that on member of the 2014 GAP Fellows class will be targeted for InCrowd Angel investment.-Ed.
INCROWD CAPITAL, the Nashville-based Angel group, has invested in two more startups, and now seeks licensee-partners to establish chapters elsewhere, said CEO Phil Shmerling.
Its latest investments, of undisclosed magnitude, are in Solar Site Design (dba for Loyal Enterprises), a marketing platform for Solar-energy retailers and installers; and, in Everly, the drink-mix startup targeting the natural grocery channel, said Shmerling, the founder of the company, which has been fully operational for a year and was chartered 18 months ago.
The company's Angels have invested more than $550K since InCrowd's inception, slightly more than $100K per portfolio company, he said. Another deal or two could still close during the balance of this year, 32-year-old Shmerling said today.
InCrowd is approaching the 40-Angel mark, with Shmerling handling recruitment through networking and word of mouth. In Nashville, the universe of prospective Angels is in the 750 to 1,500 range, he estimated. In December 2013, Shmerling told VNC he had signed 25 Angels, at that point.
InCrowd members pay $1,000 annual dues; and, nearly all InCrowd Angels also make an investment of at least $4,000 into an investment pool for each state in which the Angel is active. Each state pool then invests alongside Angels in deals meeting certain criteria. Angels who participate in a company's raise invest a minimum $5,000, each time. InCrowd does not take a carried interest on Angels' personal investments, he emphasized.
Angels may also examine deals from states other than their primary state, Shmerling explained. Startup pitches are videotaped and are subsequently available online for members, only.
Investors targeted for InCrowd recruitment are typically savvy and successful business or professional executives who have little or no prior Angel-investing experience, and want help with documentation, filings and related matters, he explained.
Shmerling said he believes InCrowd is well prepared to support such investors, whose investment experience contrasts with the investors who are heavily experienced in early-stage investment and who are associated with, for example, Nashville Capital Network (NCN).
Provided opportunities meet InCrowd criteria, Shmerling said he is receptive to collaborating or coinvesting with other Angel groups, and noted there is nothing that he knows of which precludes members of InCrowd, NCN, Selous Venture Society or Angel Capital Group from joining more than one Angel network.
The company has been bootstrapped by founder investment and Angels' membership fees, thus far. A capital raise may be considered after InCrowd gets a toehold in two additional markets, beyond Nashville, he said. Identifying licensees in other cities who fit exacting specifications has proven more difficult than he anticipated, said Shmerling.
Though InCrowd, itself, says it invests only in startups that have made it through accelerators, incubators and university or other institutional entrepreneurship programs, regional licensees will enjoy freedom to develop, operate and finance their groups using appropriate localized criteria.
Currently targeted states include Kentucky, Georgia, Arkansas and Alabama, as well as Tennessee. It will subsequently expand to other Southeastern states and the Mid-West (Ohio, Indiana, Illinois and others), he said, adding that he is receptive to approaches by would-be licensees from major cities in other regions, as well.
Though Shmerling has no immediate plans to raise capital, a raise could be somewhere over the horizon, with a likely target of less than $1MM, he said when asked.
All five of InCrowd's current portfolio companies have made it through such vetting processes. The other three firms are Remedify, which has also received HealthBox investment and which provides vital information regarding medical instrument sterilization; Initial State Technologies, a platform for streaming and visualizing data; and, Vanderbilt University spin-off InVision Heart, which offers a clinical cardiac data solution.
However, InCrowd Capital will only list for its eventual multi-city network companies that have been thoroughly vetted by its own standards, said Shmerling. InCrowd will also handled back-office functions for licensees.
Shmerling confirmed that his professional advisors include attorney Chris Sloan at Baker Donelson Bearman Caldwell & Berkowitz. InCrowd banks with Avenue Bank. Decosimo produces K-1 tax documents related to all Angels' investments; and, Shmerling does InCrowd's books, he said.
InCrowd's founder is a son of Jim Shmerling, who is CEO of Children's Hospital Colorado, based in Aurora, as well as former CEO of Monroe Carrell Jr. Children's Hospital at Vanderbilt University Medical Center.
The founder is also a nephew of entrepreneur and investor Mike Shmerling, founder of XMI Holdings, XMI High Growth Development Fund (TNInvestco), Choice Foods, XMi Community Enterprises and other businesses and entities.
According to InCrowd's website, its advisory board includes Nashville Entrepreneur Center CEO Michael Burcham; Belmont University Prof. Jeff Cornwall; and, Mike Shmerling.
In an earlier interview, Shmerling noted that while family ties are important, he's averse to using name-dropping to gain support and he bootstrapped InCrowd from savings.
InCrowd Capital was conceived as the nation bubbled with anticipation of stepped-up crowd-funding and other supposed consequences of the federal JOBS Act, which is intended to ease fund-raising, but around which much remains unclear. Thus, Angel group operations is InCrowd's focus, with other matters to be revisited, as that become timely, Shmerling explained.
Shmerling, his wife and their infant child live in Davidson County. Mrs. Shmerling works for CIGNA HealthSpring. Shmerling's LinkedIn page is here. VNC