This newsletter is written every month to the members of CTAN. We also share this newsletter with the intention of keeping potential CTAN members, CTAN sponsors, friends of CTAN, and entrepreneurs up-to-date with what we are focused on as an organization. You are receiving this newsletter because we value our relationship with you and the work that you do to support the entrepreneurial ecosystem in Central Texas.
If you have any questions regarding the contents of this newsletter, or questions about CTAN in general, please feel free to contact me. Enjoy...
My note this month is about the significant work many of you are doing to help the start-up community in Austin and Central Texas. What I am referring to is the large amount of volunteer work that is being done by CTAN members.
One of the big focus areas for us in 2012 has been the time we invest with start-up entrepreneurs in our monthly process called Office Hours. Many CTAN members volunteer their time to meet with entrepreneurs one-on-one to hear and advise them in a ten-minute discussion. The Office Hours events are for approximately two hours. Last month we had over 40 entrepreneurs and nearly 20 members at the session providing advice.
We also did a similar session at ATI, in which we focused on primarily ATI companies. It was extremely successful.
In addition, I am aware of many of you who are also meeting regularly with entrpreneurs on an informal basis. These many meetings provide insightful advice to the start-up companies. On a more formal basis several of you are on the Board of Directors or the Advisory Boards or several companies CTAN members have invested in. Our members recognize that it is not just the writing of checks that make a difference in the success of our companies, but the insight and experience our members can and do offer to entrepreneurs.
I want to personally thank all of you who do volunteer your time and encourage others to step forward in this area.
Thanks to everyone for making CTAN one of the premier Angel Networks in the country.
Rick Timmins, Chairman of the Board
Central Texas Angel Network
Executive Director Comments
Summer is here, and so is our June Funding Cycle. If you've been paying attention, you've noticed that the locations of the Funding Cycle are a little different this time. We've recently formed a partnership with LifeSize Communications that I'm very excited about and that I believe will bring tremendous value to your membership. In case you've missed it, let me outline some of the specifics in regards to the partnership:
1. Live Stream - LifeSize is leveraging their video conferencing technology to provide us with a Live Stream of each of the meetings during this Funding Cycle (Pitch Day, Screening Meeting, and Presentation Meeting). For those that participated in the live stream for the Pitch Day, I sincerely thank you. It was really cool to field your live questions and ask them to the entrepreneurs. If you can't make it to one of the next meetings, be sure to jump on the Live Stream of the meeting!
2. Recorded Video - LifeSize is recording and storing each company presentation for us so that we can access the video anytime (in case you would like to see the company again before making your decision). We also give the videos back to the entrepreneur to hopefully help them identify key areas of focus as they continue to grow their company.
3. CTAN Documentary - LifeSize is helping us create our very first CTAN Documentary, titled "Austin's Entrepreneurial Ecosystem: The role of angel investors". Because of this, we've been hosting our meetings at some of Austin's entrepreneurial success stories: LifeSize Communications (Austin startup acquired by Logitech) for our Pitch Day and Bazaarvoice (NASDAQ: BV) for our Screening Meeting. We've been getting interview role from the entrepreneurs and investors, and we will continue to do both. So, if you'd like to be "immortalized" on CTAN's Documentary, please email me and we'll get you set up for an interview at one of the next meetings.
This is a very exciting partnership for CTAN, and I hope many of you can make it out to our next meeting to see the LifeSize technology in action.
CTAN Screening Meeting Thursday, June 21
All investors are encouraged to attend this meeting to watch pitches from the Top 10 companies invited to attend. You must be present to vote on the Top 4-6 companies that will be invited to our Presentation Meeting.
CTAN Presentation Meeting Thursday, June 28
All investors are encouraged to attend this meeting to watch pitches from the Top 4-6 companies invited to attend. You must be present to vote on the Top 2-4 companies that will be invited to our official due diligence meetings.
Now, just a few quick announcements and reminders:
1. Committee Updates
Each Committee has met 1-2 times, and is diligently working towards their goals. Here is a brief update:
Term Sheet Committee - This committee has met twice, and with the help of Alex Allemann from Winstead PC, we are putting together what we hope will become the standard term sheet to be used on any CTAN deals where we are the party providing the deal docs. The goal of this committee is to produce a simple and straightforward term sheet for our use.
Deal Lead Committee - This committee has met once and had a great discussion. There will be follow up meetings shortly.
Investment Metrics / On-going CTAN Involvement Committee - This committee has met once and had a great discussion. There will be follow up meetings shortly.
**If you are interested in joining one of these committes, please email me directly.**
2. Due Diligence Updates
Ordoro, App Hive, and Descuento Libre will be giving us a 5 minute update at our June 28 Presentation Meeting. If you've been observing any of these companies, please try to come in person or watch via Live Stream.
3. Volunteer Hours
January = 218.5 hours
February = 197.5 hours
March = 285.5 hours
April = 182.5 hours
May = 287.5 hours Total YTD = 1211.5 hours
I say it all the time – one of the many strengths of angel investors is their willingness to meet with and mentor young startups. CTAN’s angel investors are no exception. We are a very active group when it comes to mentoring, with many of you spending 20+ hours each month meeting with entrepreneurs. Wouldn’t it be interesting if we could capture some of that data and publish it at the end of each year? I think it would.
Since the beginning of the year I have requested that whenever any of our members volunteer their time to help an entrepreneur outside of our normal Funding Cycle meetings (Screening Meeting, Presentation Meeting, and Diligence Meetings) that they please send me a quick email reporting those hours. It can be a simple email at the end of each day or each week. Unfortunately, I have received very few emails, and I know it’s not due to lack of volunteer activity. Next time you spend time with an entrepreneur, I hope you will consider sending me a quick email or text letting me know how many hours you spent with them. Wouldn’t it be impactful to say at the end of 2012 that CTAN donated 3,000 hours mentoring entrepreneurs? 4000? 5000?
Thank you for all that each of you does in this effort, and thank you in advance for sending me this info.
As always, I welcome your feedback and involvement in CTAN, so please feel free to reach out to me at any time with thoughts, suggestions, etc.
Jeff Harbach, Executive Director
Central Texas Angel Nework
Hyperwear creates products that improve the world through fitness, while building a premier health and fitness brand in a $150B market.
History: A fitness equipment company launched in 2007, Hyperwear received A round funding in May 2011. CTAN investors and another prominent investor took the lead.
Management: Denver Fredenburg joined as CEO at that time adding industry experience to the team. Denver began his career with a sports accessories company that was acquired by Nike. He is an Ultra-Marathoner and former Baylor D1 collegiate athlete. BAN and CVAN investors also participated significantly in the round. Since joining the team, Denver has brought in other Nike veterans for sales and supply chain, and a controller was added to the team. The company then embarked on a major re-branding strategy summarized in the tag-line: “SIMPLE. POWERFUL. GEAR.” With the solid brand platform in place, significant investments were made in marketing, educational workshops and workout videos.
Company: Hyperwear is a rapid growth consumer products brand with $1M+ trailing 12 months revenue, selling seven innovative products for health and fitness, physical education, sports performance training, weight loss, and rehab. The company is building a recognizable, valuable consumer brand, evidenced by our SandBell recently being in a weight loss segment on the Dr. Oz show. Our customers are top college and professional teams, health club chains, schools, personal trainers and consumers. Even more major media exposure is ahead with Prevention Magazine soon to publish a SandBell weight loss workout feature.
Strategy: Hyperwear’s business strategy is to leverage its successful fitness products to become a lifestyle brand. Adoption of the SandBell by K-12 school districts for PE to fight childhood obesity, and becoming an "As Seen On TV" weight loss product, have accelerated brand recognition and entry into the huge weight loss market.Revenue will increasingly come from consumer spending for weight loss and health, and we are adding video content and educational services to our revenue.
Board of Directors
Rick Timmins, Chairman
Lance Adams, Director
Bril Flint, Director
Rosa McCormick, Director
John Paulos, Director
Jamie Rhodes, Director
Pete Winstead, Director
John is a bit of a multi-tasker, but his primary focus is finding new companies and technologies and helping them bring their products to market. John does this through an Austin based company called Discovery Alliance, LLC which is majority owned by Capital Southwest (CSWC: Nasdaq). Capital Southwest is a $600M publicly traded investment company out of Dallas, TX. His seed investment role with Capital Southwest is the reason for John's participation in CTAN.
Discussing CTAN, John stated "I really like the fact that I get to see 100+ deals a year. This, plus the fact that others help with the due diligence, make CTAN a valuable part of my sourcing for potential deals. It is a very well run angel group and I'm proud to be an active member of CTAN. Also the relationship with Capital Southwest is particularly helpful because I do the seed round investing and then if larger sums are needed at a later date, Capital Southwest may be available for future rounds of investments. Capital Southwest typically invests in increments from $5-15M."
Before becoming an angel investor, John had a varied career with a number of twists and turns. After graduating from Vanderbilt University as a chemical engineer, he spent almost two years working at a chemical plant for DuPont. John left the technical world to go to law school at West Virginia University and then returned to DuPont as a corporate lawyer. He did a broad array of various types of corporate legal work including mergers and acquisitions, securities law, contracts, employment law, environmental law, regulatory issues, international legal work and patent law. John was lucky enough to get a three year assignment in Geneva, Switzerland doing M&A and international legal work for DuPont. Shortly after the European assignment, he moved to Austin with his family to become Executive Vice President and General Counsel of the newly formed DuPont Photomasks. (DuPont Photomasks was DuPont's first ever IPO and it was ultimately acquired by Toppan Inc for $650M).
John also moonlights as an inventor of consumer products. He holds about a dozen US patents and also multiple patents pending. Four of his inventions have been the basis for separate start up companies which have received angel funding.