By David Benda, Record Searchlight, Oct 2012

Shasta County business leaders have launched an effort to establish a financing network that would fund and mentor startup companies in the area.

“We have not shifted away from recruiting (companies to the area), but at the same time, we are recognizing that entrepreneurship and local startup development is going to be key to the future,” Economic Development Corp. of Shasta County
President Mark Lascelles said Monday.

And developing an angel investment group would be part of what Lascelles says is the foundation to help budding businesses succeed.

Angel investors pool their resources to provide seed money for entrepreneurs to grow their business ideas.

“Angel investing as part of a group is successful in tiny communities — I am a member in one group (based in an area) of 8,000 (people) — and larger communities like San Francisco, Los Angeles, Boston and New York,” said Bill Payne, an angel
investor and educator who has invested in more than 50 startup companies.

Payne also is an entrepreneur-in-residence at the Kauffman Foundation, one of the largest foundations in the United States dedicated to entrepreneurship.

“I think the key issue is does a community have the champions who will raise their hands and say, ‘Let’s help get this organization going,’ ” Payne said by phone Monday from Denver.

Payne was in Redding last week to give a presentation on angel investing. The seminar was put together in part by the EDC.

In a piece he wrote on the Kaufmann Foundation website, Payne said angel investors are responsible for about 90 percent of the seed and startup capital in the United States. Deals range between $250,000 and $2 million per investment for between
30,000 and 50,000 companies each year.

Lascelles is talking to individuals in Shasta County he thinks might be interested in forming a north state angel network. He is convinced the financial resources are here to make it happen.

“I would hope in probably 90 to 120 days we have the framework in place and we will be ready to look at (investment opportunities),” said Lascelles, who was in Nebraska on Monday attending a conference.

Lascelles envisions the angel network working with schools in the area that offer programs for entrepreneurs, including the Youth Entrepreneurship Program at Shasta College.

Payne explained angels could be a group that pool their money together and then vote on whether to fund a startup or individuals who weigh a deal then write separate checks.

“Some members might not like the idea and others might like it a lot and write bigger checks,” Payne said of the latter model.

Dan Morrow, who founded Redding technology manufacturer Op-Test in 2000, knows the importance of angel investors.

“Several years ago, we were in a situation where we had an excellent opportunity but we needed a source of capital,” Morrow said. “We were able to negotiate a deal with a local businessman. He wrote a check and got us into a deal and it was
a game-changer.”

Morrow said the man, whom he declined to identify, has helped with advice and guidance.

“In return, he gets a return on the investment of what he put into our company,” Morrow said.

Op-Test and its 16 employees manufacture products for overseas clients; many have headquarters in Asia.

The company builds electronic assemblies for people who make semiconductors and designs the equipment that tests LED lighting systems.

“We can characterize high brightness light emitting diodes better than anybody on the planet,” Morrow said.