23 Mar Boston entrepreneur to enliven Milwaukee angel group
Silicon Pastures, a Milwaukee investor group that has weathered a couple of slow years, is staging a comeback under the leadership of tech entrepreneur Pehr Anderson.
The angel network, a group of individual investors with high net worth, allows investors to pool strategies, knowledge and plans to make more effective investments. It began in 2000 with 13 investors, and after launching successful companies, the investors made fewer deals over the last two years.
Anderson, who dropped out of the Massachusetts Institute of Technology to found a software company with friends and sold it to 3Com Corp. for $90 million, moved to Milwaukee last year. He’s been looking for ways to encourage entrepreneurship in the area and became involved with the angel network.
As he explains it, Silicon Pastures is a way to connect investors together and give them the kinds of opportunities and resources they would have a harder time finding on their own.
“SP is not a fund,” Anderson said. “Our members make individual investment decisions. The role of the group is to allow individuals who are interested in doing this to share information and thus lower everyone’s risk.”
Silicon Pastures was last run by Adam Bock, who took over in 2003 but is no longer involved now that he has co-founded a company in Madison, Nerites, which is in the medical device market.
During his term, Bock said, Silicon Pastures investors made deals with three companies: Paradigm Diagnostics, NPoint (a nanotechnology company), and Virent Energy Systems (a biofuels company).
“For various reasons, fewer investors were active in the later period,” Bock said. “Some of the investors had chosen to wait and see how their earlier investments fared before making more.”
• Read Adam Bock’s take on “What angel networks want”
Bock handed the reins to Anderson this February so he could give more time to his start-up.
Anderson said he didn’t know why deals were down in 2003-04, but back home in Boston, “optimism had definitely not returned” after the crash. Many people he knew went into defense contracting as investment declined and what remained shifted toward security-related businesses.
“Now, I think there are a lot of people who have moved their funds into safer investments and are looking for what to do with the part of their portfolios allocated for higher risk opportunities,” he said.
Silicon Pastures has drawn investors such as Peter Skanavis, an investor who made his fortune in low-commission real estate with his company Homeowners Concept. He was attracted to the group because researching individual deals took up much of his time, and teaming up allowed angels to pool their knowledge and research.
• Read more about what Peter Skanavis looks for in an angel investment.
That sense of collaboration is a theme that extends even beyond the group itself.
“The business could look great, but the specifics of the proposed deal might not be attractive to investors,” Anderson said. “Input from one angel group could make it easier for other groups or individuals to participate.”