By GREGORY ZELLER // Long Island still has a ways to go before it rivals Silicon Valley or Boston’s Route 128 as an investment hotbed. But the science is here, and according to many insiders, so is the money.
And now, Island investors find themselves awash in something they’ve never experienced before: competition.
Suddenly, there are multiple seed-money organizations throwing money at Island-based startups. The Long Island Angel Network, Angel Dough Ventures, the Long Island Emerging Technologies Fund, Jove Equity Partners, Topspin Partners – the list of Island-based investment groups is getting longer, with principals repeating the same calls to spur the Island’s latent capital to action.
Add to the mix Garden City Park-based AngelFire Ventures, the newest attempt to organize the Island’s disparate investors into a cohesive business-acceleration force. Launched late last year by partners Rich Foster and Harvey Brofman, AngelFire inked its first deal in February – a $250,000 investment in Mineola-based tech firm ProSeeder Technologies, with a commitment to additional funding in later rounds – and has subsequently closed two more early-round investments, with over $1 million in capital placed.
Foster and Brofman are no strangers to the Island’s investment scene. A former board member of the Long Island Angel Network, Foster is a serial entrepreneur whose Garden City Park-based Foster Management & Holdings has already invested about $3 million across a wide portfolio of early-stage companies.
A 25-year veteran entrepreneur with a long résumé of pioneering new healthcare informatics and IT, Brofman began investing with the NYC-based New York Angels five years ago.
Like other angel funds, the basic premise of AngelFire Ventures is to get funds to tech startups in need of a capital boost – and Long Island, Foster noted, has plenty of those.
“There are many good ideas and startup companies,” he said. “And there’s plenty of investment capital on Long Island. So we said, ‘Let’s create a model that leverages some of our existing connections with other investments and startups.’”
As with similar investment groups, AngelFire Ventures asks its investor-members to vote on which projects the group will fund as a whole, while giving members a chance to pile on additional “sidecar” investments. There are currently 18 AngelFire members who are free to pick and choose their own side deals – though if they do decide to add a personal stake, they must do it through AngelFire’s sidecar protocols.
“There’s no requirement that anybody invest anything beyond the initial funding,” Foster said. “But if they do want to, it has to go through the AngelFire entity. Most organizations like this work that way.”
In addition to that opening investment in ProSeeder, AngelFire Ventures’ group investments include stakes in Trumpit, a Boston-based software developer with an app that allows photo messages to appear directly on a smartphone’s lock screen, and LiftMetrix, a New York City software firm that analyzes consumer responses to help clients maximize their advertising return on investment – calculating the best time to increase an advertising budget, for instance.
The fact that two of AngelFire Ventures’ deals involved off-Island startups shows the fund is more interested in complementing Long Island’s burgeoning investment entities than competing with them, Foster added.
“I can’t speak about how those other groups look at each other, but as we see it, from an investment standpoint, our viewpoint might not be the same,” he said. “We view ourselves as a more regionally focused group, versus being a strictly Long Island group.”
That said, Foster and Brofman both have Long Island roots, and one of AngelFire Ventures’ ancillary goals is to encourage investment in this region from benefactors both near and far.
“There is so much untapped money on the Island,” Foster said. “We want to get more investors involved and hopefully create more educated angel investors. One of our long-term goals is to not only get people to invest in these companies, but to get investors to start seeing Long Island as a good place to make deals.
“Once we hit that mark where some of these local companies are raising $10 million rounds, instead of $1 million or $2 million rounds, investors will start taking a more serious look at Long Island companies,” he added. “When we get some more successful exits under our belt, investors will really start to notice Long Island.”
What’s It? Long Island-based investment fund for early-stage companies
Brought To You By: Serial investors and experienced entrepreneurs Rich Foster and Harvey Brofman
All In: About $100,000 in personal investments by the cofounders, to seed the fund and cover back-office expenses
Status: Three deals done, more in the hopper