Ohio TechAngels may not have been Ohio's first angel fund, but since its founding in 2004 it has grown to become the largest -- not just in Ohio, but in the entire United States.
Earlier this month, Entrepreneur pegged the Columbus-based investment group as the largest in the country with 282 members, ahead of Los Angeles's Tech Coast Angels, with 263 members.
Cleveland-based North Coast Angel Fund also made the top 10 list, coming in fifth with 180 members. Ohio was the only state with two angel groups in Entrepreneur's top 10.
John Huston, who formed Ohio TechAngels in 2004, says there never was a plan to grow the group to any particular size.
"I moved back to Ohio from Boston, where I was a banker, and after a year I was bored," he remembers. "What I missed was working with CEOs."
But when he looked for an angel fund in which to become involved, he could find none in central Ohio, he says. So, to learn how to start his own, he enrolled in a boot camp run by Ohio's first angel fund -- Cincinnati-based Queen City Angels.
Since then, Ohio TechAngels has offered three funds and made 53 investments in 33 Ohio-based, tech-related companies, Huston says.
He says Ohio's angel environment has four things going for it. First is the Ohio Technology Investment Tax Credit, which gives angel investors a 25 percent tax credit for investing in Ohio-based tech startups. Second is the Ohio Third Frontier's Innovation Ohio Loan Fund, which lends money to early stage companies.
"If you're an investor, that's non-dilutive capital, which increases return for shareholders," Huston says. "It provides access to debt before any commercial bank will lend to them. Half of the companies we've invested in have been able to borrow under that program."
A third strength of Ohio's angel environment is what Huston calls "a great infrastructure of incubators" that are equipped to assist early stage companies in ways that help them succeed. And fourth are the pre-seed grants provided by the Third Frontier, he says, noting that a substantial part of Ohio TechAngel's three funds -- some $6 million -- has consisted of state grants that include money from the Third Frontier.
In the end, Huston says, it's not about how many members Ohio TechAngels has, but how many companies they help.
"The myth is that angels are a bunch of geezers with a lot of money who are trying to make a lot more money," he says. "What we're really trying to do is make meaning -- by building entrepreneurial wealth."
Source: John Huston, Ohio TechAngels
Writer: Gene Monteith