Angel Funding for Aberdeen Area Entrepreneurs
Thursday, May 24, 2018
One of the primary challenges in starting a business is finding a funding source. New ventures often don’t qualify for traditional bank loans due to lack of cash flow or collateral. That’s why angel investors are an attractive alternative for entrepreneurs.
With angel investing, funding comes from an individual or group of people — typically successful business owners. Angel investing allows startups to gain quick access to money. In addition, since investors are hoping for a healthy return, they often offer new business owners expertise and mentoring.
Aberdeen area businesses now have the ability to appeal to a local angel fund called Hub City Capital. The group formed in January 2018 and has 21 member investors, including the Aberdeen Development Corporation.
“A number of angel investor groups exist in South Dakota, but none were in our specific area,” explains Aberdeen Development Corporation CEO Michael Bockorny. “We got together with a couple of like-minded folks and longtime business people in Aberdeen and decided now was a good time.”
Hub City Capital is administered by the South Dakota Enterprise Institute and is actively seeking proposals from startups and businesses in Northeast South Dakota that want to grow.
“The access to the early stage capital that an angel fund provides plays an important role in the financing chain of startup companies,” says Tom Eitreim, program director for the Enterprise Institute. “Hub City Capital will help to create new opportunities and broaden the entrepreneurial ecosystem in the Aberdeen area by providing access to growth capital for entrepreneurs.”
The fund has already had a number of applications, according to Bockorny. He notes that the Enterprise Institute is a great resource for entrepreneurs and can help ensure startups have a solid business plan and financial projections before they make a formal application.
Bockorny points out that investors have an interest in helping ventures find success. “This is not a philanthropic endeavor, ultimately investors are looking to make money,” Bockorny says.
This isn’t a short-term project. It’s an investment in developing the area’s economy.
The goal is to help fund companies that can start up and expand in the Aberdeen area. “Ultimately, what we want to see is businesses that start here and stay here. That’s really important,” says Bockorny.
Over time, Bockorny expects Hub City Capital to grow. “Entrepreneurial concepts and individuals are alive and well in Northeast South Dakota,” he says. “There are great ideas and potential and I know there are going to be some successes that come out of it.”
To learn more about applying to the Hub City Capital fund, contact Tom Eitreim: tome at sdei.org.
Aberdeen Development Corporation is a member of the South Dakota Prairie Gateway, a portal for economic development information in Eastern Rural Communities of South Dakota.