Despite the fact that stores and companies are shutting down left and right amid tough economic times, options still exist for entrepreneurs with good ideas, even if they don’t have a lot of money. The Business Technology Center (BTC) on Lincoln Avenue in Altadena, for example, has been helping small businesses and start-up ventures get on their feet since 1998.

 

It provides subsidized rent, flexible office space in a professional setting, a team of advisers, conference rooms and other resources to businesses across Southern California. At a Tech Week event held at BTC in October, Los Angeles County Supervisor Michael Antonovich, who was instrumental in helping launch the business incubator, praised BTC for the help it has provided local businesses, as well as the regional and national economy.

 

“Delegations from more than 40 countries have come [to BTCS] to see what we have,” said Antonovich. “It has received several national and state awards for its impact in start-up, seed stage and emerging growth companies. Its success was a collaboration between risk-taking entrepreneurs, private investors and other resources, creating an engine for economic growth in LA County that has attracted over $170 million in equity and created over 1,700 jobs so far.”

BTC is also home to the Pasadena Angels, a group of about 100 private investors who provide consultation and financing to local, early stage start-up ventures as well as emerging growth companies. It is one of the largest seed money investor networks in the nation. Every month, the group receives 20 to 40 applications from small businesses seeking its services. Individual Angels are assigned an application and serve as the lead pre-screener. 

 

The pre-screeners investigate and meet with the organization or company, visit their facility and see if they have a good management team and a solid idea with growth potential that will eventually help the Angels earn their money back, should they choose to invest in the business.

 

All of the Angels then meet with their committee members and go over various proposals. They narrow the list down to about six and hold pre-screening meetings at BTC, where representatives from the businesses give brief presentations. The Angels ask questions and give them feedback. Over the course of a month, a business will have gone through three or four meetings before they can give a longer presentation to the entire Angels congregation at monthly breakfast meetings, formal events held at Annandale Golf Club. 

 

Those meetings begin at 7:30 a.m. sharp. Angels who bring guests introduce them to the group. After the chairman makes a few announcements about upcoming events, he yields the floor to the lead pre-screener of the first presenting business. A representative from the business has about 30 minutes to deliver his or her pitch to the room of investors. This is a chance to convince the Angels that the company is worth investing in. When they finish, they are asked to step outside the room while the Angels discuss the pros and cons — and ultimately the profitability — of investing in the business. 

 

“It could be something an investor really likes, but we need to consider whether or not it will make us money in the end,” Pasadena Angel Stan Tomsic explained.

 

The Angels fill out forms indicating their level of interest in the business, which they then submit to the Angels administration, as the representative comes back into the room and gets feedback from the chairman. This process is repeated with the second presenting business. At the end of the breakfast meeting, the Angels receive updates on prior investments.

 

“There are a number of positive and negative criteria that trigger interest or disinterest,” said Tomsic. “We tend to veer away from lifestyle companies and look more at growth potential.”

 

Barry Paulk, the head of marketing who sits on the Angels’ board of directors, explained that there are certain qualifications one must have for membership, including being an accredited investor, which means having a certain amount of disposable income and net worth. While there are no hard and fast rules, Angels are generally expected to invest about $50,000 a year.

 

“We’re really pushing to get more female members,” said Paulk, noting that the majority of the members are male. “We’ve added two or three very sharp ladies, but we’re looking to add more.”

 

Most of the companies applying to the Angels come from Southern California’s five-county metro area, according to chairman Al Schneider. “Last year they invested the most money in a company from Caltech called Rockoco, which deals with new technologies in the diamond-etching field,” said Schneider.

During the November meeting, Schneider reiterated the group’s mantra, “It’s more than the money,” and spoke of the importance of supporting nonprofit organizations just as much as up-and-coming businesses. He asked the more than 100 attendees at the meeting to raise their hands if they have or currently sit on a nonprofit’s board of directors. Almost every hand was raised.

 

“I’m preaching to the choir here,” said Schneider. “We’ve all been in this line of work. Clearly, these nonprofits we work with need our financial support as well as our good counsel, as these countless solicitations we get all year-round but particularly this time of year, remind us. But even with such organizations, I think it’s fair to say that they need more than the money, and we can help them in many ways other than writing checks,” Schneider said.

 

He specifically mentioned two local nonprofits working on altruistic products. A former USC architecture student is working on a product called Cardborigami, a $30 foldable, treated cardboard overnight shelter that can be used by the homeless or disaster victims. 

It provides a very portable, private space that can be folded up and carried around to provide some degree of instantaneous overnight protection from the elements. The second one, called Get on the Bus, helps as many as 1,300 kids stay in touch with parents in prison by providing bus transportation to families of the incarcerated.

Angel Terry Kay updated the group about A Noise Within, the classical theater company that just completed its move from Glendale to east Pasadena with a $13.5-million capital campaign. 

 

The nonprofit organization opened its new 283-seat, 33,000-square-foot performing arts complex on Oct. 29.

 

“One of the cool things they do is they use about 30 percent of the budget for school outreach, where kids from inner city schools get bused in and see live theater for the first time ever, which really is a life-changing event for them,” said Kay, who has been on the board for 10 years and served as president for seven. “About 20,000 students visit each year.”

 

Each year, the Pasadena Angels invest about $3 million in 12 to 15 emerging growth and seed stage companies and nonprofits. It’s one of the last remaining options in a recession-era economy for local entrepreneurs to turn to for funding to help them get their business and products off the ground.