The St. Louis Arch Angels are a driving force in the region’s entrepreneurial ecosystem, connecting promising startups with accredited investors who are passionate about fostering innovation. As a nonprofit, the organization does not make investments; it facilitates investments through membership.
Under the leadership of chairman and CEO Brian Kinman, the organization has grown into a dynamic community of approximately 70 active members who provide both capital and mentorship to early-stage companies. This organization has facilitated more than $120 million in startup investments during the past 20 years.
But who are the Arch Angels, and why are they pivotal for startups and investors alike?
The organization as a whole serves as a resource for startups and companies with the potential to grow to $10 million or more in annual revenue within five years. Investing at this early stage in the startup can be a risk, but it also comes with preemptive rights that allow members to invest alongside venture capitalists in the later stage.
“Every time I walk out of these meetings, it’s kind of like the same feeling as when you walk out of the gym—you’re feeling energized,” says Kevin Jones, an investor with Arch Angels. “I get to watch very intelligent people doing things I had no idea people were even working on and advancing society along the way. It’s exactly like watching Shark Tank, but you get to be part of it all.”
But it’s the startup businesses, such as MaxFi Surgical Simulations, that benefit the most. “The Arch Angels don’t get the recognition they should for how much they’re helping the business ecosystem in St. Louis,” says MaxFi CEO Bob Mills. “In essence, they’re a group of people coming together to really help fund and grow different businesses that call St. Louis home.”
How startups get involved with the St. Louis Arch Angels
To maximize bringing the startups with the most potential to the pool of investors, all startups must follow a formal screening process. This includes the assessment of the startup’s management team, business plan, market opportunity, intellectual protection, and several other key factors. Through these due-diligence meetings, the Arch Angels offer feedback or mentorship to help the venture if they aren’t far along enough to invest yet, or even if they don’t plan to invest at all.
“The Arch Angels are always sure to prepare you because they want to see you be successful,” Mills says. “They’ll tell you up front what investors are looking for before even coming in front of the group. They’ll help provide a good outline of what investors are expecting in a pitch, from the model to the forecasted success, and it’s up to you to develop it.”
Startups such as MaxFi that show potential will then go through a screening meeting to present ideas to a room of other business leaders, engineers, physicians, scientists, and more to receive feedback. If they show continued promise, then startups are on to an official pitch in front of investors for seed and early-stage capital. When individual members have decided they may want to invest in a startup, the Arch Angels organization helps coordinate the due-diligence process and will help set up a limited liability company (LLC) to facilitate member investment.
From there, however, the mentorship provided by the Arch Angels does not stop. “The Arch Angels are one of the most supportive groups of investors I’ve encountered,” says Bryan Bowles, CEO and Founder of Transactly. “In the real estate industry, we were facing a very tough market as interest rates soared, but with the Angels, we were able to pick up the phone and they’d help any way they can—whether that comes in the form of advice, connecting you to the right person, or any other overall support to your unique challenges.”
How investors benefit from the St. Louis Arch Angels
Investors with the Arch Angels, called members, participate in around 10 meetings per year, which means they have a front-row seat to great ideas and businesses blooming in St. Louis.
“As a member of this organization, you are watching evolution,” Kinman says. “I’ve been a member for 12 years, and what we see today versus 12 years ago is night and day. The concept of the way to cure cancer is being addressed differently today, for example.”
Members are also granted access to one of the top networks in St. Louis through Arch Angels. “The education I get from seeing these companies and participating in the discussions about them is huge,” says vice chairman and member Chris Dalton. “We all have a tendency to continue to learn about whatever space you’re in, whether that’s medical or agriculture, but we forget new things are out there. There may be a new widget someone is working on that may be beneficial for your world. It’s not just the presenters who are learning.”
Dalton believes it’s the St. Louis region that benefits the most from Arch Angels, though. “When young people get out of school, what’s going to keep them glued to the area? Or what’s going to bring somebody in from another city?” he says. “You have to have a vibrant job market and, in general, young people get excited about the types of new opportunities we’re helping to provide.”
This post was created by SLM Partner Studio on behalf of St. Louis Arch Angels. To learn more, visit www.stlouisarchangels.com.
