Louisville Angel Investors Step Up: Now Is the Time to Raise Investment

By Alex Day, CEO and Founder of the Sheltowee Business Network, aday@sheltowee.com 

If you are interested in helping entrepreneurs innovate and develop societal-changing technologies, then you need to read this article.  I have had the opportunity to watch the Louisville Entrepreneurial Ecosystem for the past 20 years.  I often hear some of the high-profile early stage investors state that there is plenty of money in Louisville, that we don’t have enough “good deals.”  When I hear people say this, I usually have a couple of thoughts.  I will share those later.  I have had the opportunity to manage a couple of investment funds.  What I found, is that with a small amount of money, you can attract a LOT of deals.  You can even attract “good deals.”  That is one of the reasons that a major thrust for Sheltowee is to help establish more early stage investment dollars through the establishment of an angel investor network.  We believe that by establishing a formal group that shares our core values, we will be able to have a very positive effect on the local entrepreneurial ecosystem.  Sheltowee will be merging with the Angel Capital Group (ACG) in January to establish the Sheltowee Angel Network and this will expand our reach into Knoxville, Nashville and several other communities.  We will also leverage the experience, talent and skill set of Eric Dobson, the CEO of ACG, to help us establish a Louisville Angel Investor group. 

Communities around us have established successful angel investor groups.  Lexington with the Bluegrass Angels, Cincinnati with the Queen City Angels, Ashland with the Tri-State Angels, and Elizabethtown with the Lincoln Trail Venture Group.  We will be seeking to collaborate with these groups to help grow the angel investing community in Kentucky.  For those who say that we have “plenty of money in Louisville,”  to an extent they are correct.  But to lay it at the feet of entrepreneurs, that we do not have enough “good deals” is disingenuous.  As someone who has leveraged small amounts of capital to develop deal flow, this is a red herring.  As an observer of this ecosystem for 20 years, I have found the high profile “angel investors” to be anything but angelic.  Those who shout, “there is plenty of money in Louisville” the loudest, are the ones who do not want any outside capital coming into Louisville. 

For 20 years there has been a small group of people who have dominated entrepreneurial investment.  They have enjoyed tremendous influence and the ability to dictate terms to entrepreneurs that were often “take it or leave it” situations.  Many of the entrepreneurs who were embraced by this community have a difficult time seeing the long-term results of an incestuous and conflict-ridden investment environment.  An environment, where if you were not willing to accept onerous and disrespectful terms you have to leave the Kentucky.  For each entrepreneur who was embraced and willing to accept the monopolistic terms for investment, there are many more who either did not get they capital they needed, or had to leave the state to continue their business. 

Now the “high profile” capital providers would say that the best deals received the funding they needed.  The ones who complained are just cry babies who didn’t get funding.  Well let’s look at some of those so-named “cry babies” who left the state.  Alex Frommeyer of Beam, Nate Morris of Rubicon Global, Chris Jaynes from Mersive to name a few.  These are all companies that left Kentucky, in part, because they could not source the financial resources they needed here to grow their businesses.  I believe that this is proof positive that the mantra from “high profile” investors that there is “plenty of money” in Louisville is a self-serving and false narrative. 

If you would like to play a role in helping entrepreneurs grow their businesses and make money while doing it, then please reach out to me at aday@sheltowee.com.  We are seeking angel investors who share our core values of helping others, acting in a kind, ethical and transparent fashion, and honoring those who assume the risk.  Together we can truly impact our city, our state and our region, by changing our entrepreneurial investment environment from one of self-serving toxicity to one of collaboration and mutual respect.  We look forward to collaborating with LEAP, TALK (our local tech council), and Story Louisville to help effect the overall positive change in our entrepreneurial ecosystem, to which they have been a catalyst.