IS IT TRUE: March 3, 2012
IS IT TRUE that the most successful angel investment group in the United States was bombarded with just over 620 business plans last year from entrepreneurs seeking funding from their group?…that a full 500 (80.6%) of these plans were rejected without consideration?…that left 120 (19.4%) that were actually read in depth and given serious consideration?…that of these 620 business plans that only 16 (2.6%) or 1 of every 40 was selected to receive funding?…that 50% of those are expected by the investment group to fail during the early stages?…that the average investment is about $500,000 per business and that the largest of the investments was in the $1.5 Million range?…that nowhere in the investment criteria for this or any angel group of record is there a metric for the number of jobs created?…that the criteria is clearly that the investment needs to be within 50 miles of the investors, have a protected technical content, a coachable management team, AND a feasible exit strategy?…that the point we are making is that investing in start-ups is risky business that involves extensive technological vetting and financial vetting skills and even then the failure rate is over half?
IS IT TRUE that Evansville has no active visible angel or venture investor groups within 50 miles and thus local entrepreneurs are at a loss for where to submit a business plan?…that rightly so, that Mayor Winnecke made the formation of an angel investment group a priority during the campaign of 2011?…that angel investment groups do not access public money as a funding source and are not even particularly interested in government funding programs for their portfolio companies as such things often come with conditions and goals that are not compatible with a good business plan?
IS IT TRUE that it was announced yesterday that the City of Evansville is making a substantial loan with an opportunity at sharing in future profits of a start-up energy company from Texas named Earthcare Energy?…that the big part of the announcement are the 120 jobs that may be placed in the Park 41 complex by Earthcare Energy when and if manufacturing is established?…that the company website shows a fairly impressive management team but refers to no product installations whatsoever?…that there is a short “white paper†describing the technology proposed that was apparently written by a company from Nevada named Langson Energy who is referenced as a granting a license to Earthcare Energy in a July 2011 press release?…that a search of patents and trademarks at the website for the United States Patent and Trademark Office under the name Earthcare Energy yielded no results?…that you may confirm this at www.uspto.gov?
IS IT TRUE that the City of Evansville is making a loan of $5 Million, covering 2 years of rent on 60,000 square feet that is worth approximately $250,000, and that the State of Indiana is kicking in $1.16 Million of incentives for what looks to be a full out start-up company?…that is has been reported that the CEO still has a day job as an airline pilot?…that Mayor Winnecke is breaking new ground with this deal and will either come out of this looking like a visionary or a fool with little margin for anything in between?…that the CCO hopes that the VETTING done on this company was 1,000 times better than the VETTING done by the previous administration on downtown convention hotel development?…that we wish this venture well and hope to see it succeed?…that this type of daredevil investing is necessary in places where there is no private investment entity willing to support entrepreneurship?…that we would be most curious to know if Earthcare Energy attempted to raise capital through private channels and what the results of the private VETTING efforts were?
You expected a “new” administration would be different?
The same folks are in charge here; just moved around a little.
Lets talk balfields again. McCurdy. etc.
This deal does not sound good for Evansville. The City of Evansville needs to solve the convention hotel and other problems before putting our limited dollars at a huge risk on this startup business. The Mayor got some really bad advise on this one.
Winnecke is on the GAGE executive committee. Abell just joined the board. They served together as county commissioners. You said not to assume Abell was a puppet. Fair enough. But even you agree that this is not a good deal. So who’s pulling the strings here?
Last paragraph is pretty good writing for a fledgling blog
Why hasn’t anyone addressed the license that Langson Energy has granted to Earthcare Energy? Once we know the nature of that transaction and the intellectual property that has been licensed we can assess the odds of success and failure. Another imporant detail is Earthcare Energy’s financial respources, of which we also know nothing. Until then we are in the dark.
And if by the grace of God Earthcare Energy becomes a huge success some arnchair quarterbacks will find themselves eating crow.
The riddle of the day is, “how many start-up companies can you fund with $6.3 Million”.
The answer is about 15 unless you happen to be the Mayor of Evansville in which case the answer is ONE.
My question is: why would a company based in Texas (home of the Great Job Creator), land in little old Evansville? “Anyone?” “Anyone?”
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