New funding possibilities are opening for startups in the Southeast United States through a partnership between Seedfunders, a St. Petersburg-based investment group, and the TiE Florida Angel Network.
Under the partnership, TiE FAN will refer companies that don’t meet its own funding criteria to Seedfunders for potential financial backing. If the companies pass Seedfunders’ five-stage vetting process, TiE FAN and individual TiE members will be able to invest alongside Seedfunders partners in the deals, said Joe Hamilton, publisher of the St. Pete Catalyst and a Seedfunders partner.
The partnership also expands Seedfunders’ geographic focus because it will funnel companies in four metro areas where TiE has chapters — Tampa-St. Pete, Miami, Atlanta and Charlotte — to the St. Pete investment group.
The partnership is an economic development tool that will boost entrepreneurship while expanding Seedfunders’ investment opportunities and give TiE members new ways to back young companies, said Irv Cohen, Seedfunders co-founder and partner.
“It drastically expands the pipeline of opportunity to Seedfunders to help us bring the best opportunities to our investors,” Cohen said. “It’s part of the long-term goal to develop the entrepreneurial model in our region.”
TiE FAN is an investment group made up of some of the members of TiE Tampa Bay, a nonprofit organization that encourages entrepreneurship and is one of 60 chapters in 17 countries of Silicon Valley-based The IndUS Entrepreneurs.
TiE FAN’s investment criteria does not allow it to lead investments in companies that are pre-revenue or companies that are seeking less than $1 million in capital, said Suhas Apte, president of TiE Tampa Bay.
“We have a lot of entrepreneurs who are at an early stage, raising money from friends and family, but once they get to the next round, there’s been no one to invest in them,” Apte said.
Those are the companies that are in the sweet spot for Seedfunders, founded by Cohen and David Chitester in 2017.
There is a risk to investing in pre-revenue, early stage firms, Apte said. “Only one in 20 or 25 will hit it out of the ballpark,” he said.
But providing investment capital to them could help them grow to the size where they can meet TiE FAN’s criteria.
“I look forward to growing companies that we can then pass back to TiE FAN in later stages,” Hamilton said.
Seedfunders also recently launched a new funding organization to back young companies in Orlando. SeedFundersOrlando is focused on investing in pre-revenue technology companies in the Orlando area.