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Fierce competition for angel funding

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Early-stage ventures seeking capital gathered at the Venture Association of New Jersey entrepreneurship expo today in Hanover amid a climate for raising money that is flush with both competition and opportunity.

Ted Hayes, managing director of the angel investment group Golden Seeds, was among the panelists who critiqued the pitches that the entrepreneurs delivered about their ventures. Hayes said Golden Seeds invests in ventures created and run by women, and about 80 percent of the group’s 300 angels are women.

While the entrepreneurs say it’s tough to raise money, “I don’t see it being that tight at all,” Hayes said. “I see more money out there, ready to be invested, especially in the angel side,” though he said later-stage money from venture capital firms may be tighter. And he is seeing syndications among angel groups that join forces to back new ventures.

Hayes is looking for good ideas and a great team: “It is really the people that matter, the team, the founders. Trying to assess them is the most important thing for me.”

Wayne K. Barz, manager, entrepreneurial services for Ben Franklin Technology Partners — a fund the state of Pennsylvania founded 30 years ago to invest in startup companies — was at the expo looking for new companies. Barz said a New Jersey venture would have to move to Pennsylvania to be funded by his organization, and he said over the years several early-stage ventures have moved from New Jersey to Pennsylvania and been funded by Ben Franklin.

“We can invest about $100,000 in (a venture), and we have an enormous network of people we can connect them to, and an incubator that is a great facility with a lot of lab space,” Barz said.

Among the entrepreneurs at the expo, held at the Hanover Marriott, in the township’s Whippany section, was Dr. Lloyd Marks, a pediatric cardiologist whose firm, MBI Medical, has developed a medical device that monitors the flow of blood to the patient’s arms and legs, to better detect early stages of shock. Marks said the device could both improve patient care, lowest health care costs and reduce adverse medical events in hospitals. He is trying to raise $500,000 to get the device through FDA approval.

“It is very, very tough to raise money,” he said, but he’s encouraged by the response he’s had from doctors — including anesthesiologists “who want to buy it right now.”

Lumos Learning is a Piscataway venture that has developed software to help middle school students improve their writing skills. The company is seeking $500,000. Said company executive Vivek Krishnaswamy, “Education technology has become one of the main areas in the market today. Many entrepreneurs are looking to go into education technology, so raising money is very competitive.”

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Beth Fitzgerald

Beth Fitzgerald

Beth Fitzgerald reports on health care, small business and higher education. She joined NJBIZ in 2008 after a 34-year career at the Star-Ledger and has been reporting on business in New Jersey since 1978. Her email is beth@njbiz.com and she is @bethfitzgerald8 on Twitter.

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