Additionally, the Ann Arbor-based Michigan Angel Fund is in the process of raising its fifth fund, according to Skip Simms, the fund’s managing partner. Simms said the key goal with fundraising efforts is more about bringing in new members rather than hitting a specific dollar amount.
“My No. 1 goal for the fund isn’t the amount or size of the fund,” Simms told Crain’s. “It’s the number of people participating in the fund. That’s what I want to do, and it’s in line with … getting more people in the asset class, and learning by doing.”
Michigan Angel Fund has raised upward of $10 million over its five funds, according to Simms.
Getting more high-net-worth people involved in angel investing stands as a key theme for many sources.
York with City Side Ventures, as well the Birmingham and Great Lakes angel funds, said getting that message across to would-be investors has gotten increasingly easier, particularly ongoing economic tumult during pandemic times. That’s because more traditional investments like the stock market or commercial real estate are increasingly volatile, according to York.
“So I think it’s more attractive to wealthy individuals right now, because there’s not too many alternatives,” he said.
The idea of diversifying beyond the stock market was appealing to Zeno Windley, a member of the Birmingham Angels investor group since late 2019 who has invested in around 15 companies. But the social aspect, and the opportunity to learn about new technologies and companies, is something that has “energized and “mentally stimulated” the 75-year-old investor, he told Crain’s.
“I was just looking for something rather than just continue to put money in the stock market,” Windley said. “I wanted something that would energize me some, plus offer an opportunity for some significant return.”
Lyle Wolberg, the CEO and senior financial life adviser at Southfield-based financial advisory firm Telemus Capital LLC, said he takes a “vintage” approach when it comes to advising clients on a variety of public and private market investments
“Just like stocks have a cycle, we think the private markets have a cycle as well,” Wolberg said. “So you allocate a percentage of money to private investments over three to five years. You might not find the one diamond, but at the same time, your chances (are greater) over five years.”
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