Bill Payne might be a little bit of all three. Since the early 1980s, Payne has invested hundreds of thousands of dollars in startup firms. Payne entered the angel investing market after he sold the company he co-founded, Solid State Dielectrics Inc., to DuPont in 1982.
An angel investor is one who provides financial backing for small startups or entrepreneurs. The asset class is considered very high risk investing, with about half of the investments expected to “return zero,” or less than the capital invested. Only about 10 to 15 percent of investments are “home runs,” in which funded companies provide the investors with 10 times or higher returns on investment.
“I’ve been an investor in early stage companies,” Payne said. “I’ve got 60 under my belt. You’ve have to be willing to take the risk of working with such companies.”
Payne, 72, is hoping to get more business owners, doctors, lawyers and investors interested in taking a similar risk to fund a Las Vegas startup. To do that, Payne and three other investors were recruited to teach a certificate course on angel investing at the University of Nevada, Las Vegas.
“It’s a great idea,” Payne said before hosting the second of three informational sessions. “We got four people from the first session. One is a student participant of the Rebel Venture Fund.”
Angie Douglas, associate director of the Center for Entrepreneurship, expects 10 to 12 people to register for the three-week course. The last information session is Tuesday at 5:30 p.m. in room 224 at the UNLV student union.
After Payne’s 20-minute presentation earlier this week on Tuesday, Lori Wohletz was intrigued.
“I like the idea,” said Wohletz, a Las Vegas resident. “I’m invested in the stock market and in real estate. I have some additional money to invest and this program looks very interesting. Plus I have a lot of friends who are poker players who have a lot of spare cash and are looking to do something with it.”
Payne said the program is “more about the finance aspect” of angel investing, we “don’t tell you how to build a management team.” The certificate program, developed by the Center for Entrepreneurship at the Lee School of Business, consists of six, three-hour classes.
Each course is taught by an instructor with knowledge in their respected areas of expertise, he said. Payne will teach three courses, including introduction to angel investing, valuation of early stage ventures, and the final session on pitching a startup.
Mark Brennan, president of Brennan Consulting Group and a member of Vegas Valley Angels, will discuss the importance of due diligence to minimize the risk by properly analyzing specific detail before investing.
Bryan Clark, founding principal of the Las Vegas law firm Cane Clark LLP, will discuss structuring investment deals and term sheets, and Bill Botts, who held executive positions with Rockwell International, Vertex Design System Inc. and other firms, will lead a session on post investment relations by investors.
“I’m not sure there is any other program like this in the U.S.,” Payne said. “This is truly unique.”
Payne said investors looking to fund startups should understand placing a value on companies “creates lost of anguish between investors and owners.” He said proper due diligence “makes a difference in the outcome of whether you’ll be successful or not.”
Payne said angel investing is not about building a company “to pass on to our children,” instead “we hope that in five to seven years they can grow to the point where we can sell them to a public company.”