Venture Capitalist Group Leads the Way Where Some Angels Fear to Tread
Entrepreneurs who focus on military, intelligence, law enforcement or homeland security technology solutions can turn to the dark side for investment capital. While reports about “angel investors” have been scarce in these days of global recession, one organization continues to explore and support companies in these high-growth industries. D’ArchAngels comprises a network of relatively high-net-worth individuals with backgrounds in several different national security areas.
D’ArchAngels is a comparative newcomer to the legion of venture capitalists. Conceived in the spring of 2008, the group took its current form over the past summer; it has since received several hundred business plans. In addition to former members of the intelligence community, the D’ArchAngels comprise former members of the U.S. Defense Department as well as professionals who have been involved in homeland security. Names of the 25 individuals who make up the group are kept confidential with the exception of those who agree to represent the group to the public. The annual membership fee is $2,500.
D’ArchAngels’ venture capitalists are presented with the cream of the crop of the hundreds of business proposals received through New Vantage Group; the group manages D’ArchAngels as well as early-stage venture funds for several other angel investor groups. In the past nine years, New Vantage Group members have invested more than $45 million in several dozen companies. In addition to obtaining leads from the New Vantage Group, D’ArchAngels receives business opportunity proposals from other venture capitalists aware of D’ArchAngels’ focus.
Dan Mindus, senior associate, New Vantage Group, explains that D’ArchAngels only invests in companies that, at the very least, have a working prototype of their solution, are in the marketplace and want to grow. At monthly meetings, two companies are invited to present information about their products to the D’ArchAngels.
“We focus on military, intelligence, law enforcement and homeland security because there are limited financing alternatives for early-stage, high-growth companies in this area. Angel groups all across the country have formed to meet this financing need for high-growth companies in many sectors—information technology and biotechnology, for example—but aside from D'ArchAngels, none has an expertise in this area,” Mindus says. D’ArchAngels members also use their connections to link companies in which they invest to the appropriate government agencies, he adds.
As of March, D’ArchAngels had invested in only one company: MiserWare, a technology created by Dr. Kirk Cameron, associate professor of computer science at
“D'ArchAngels is a new group and will fund more companies over time. We have a very high threshold for the companies we fund. We consider growth opportunities, market, management team, etc. We have gone into due diligence with other firms, but this was the only one where we chose to move forward,” Mindus relates.
Among the other promising capabilities the group has reviewed are a detection system that can identify a liquid through its container and a ball of approximately a dozen sensors that would be tossed into a crowd to gather intelligence about activities. Sensor technology actually is one of two technology needs that will loom large in the future, Mindus predicts. The other is cybersecurity.
Companies interested in being considered for D’ArchAngels funding should contact the New Vantage Group, which meets with the entrepreneur and reviews the business proposal, then decides if it qualifies to be presented at one of the D’ArchAngels monthly meetings.
