Posted: July 1, 2011

By Bill Cresenzo

bill.cresenzo@insidebiz.com

In 2007, Joel Nied, an attorney with Williams Mullen in Virginia Beach, teamed with Gregory Stringfield, an accountant, and Paul DiNardo, a financial adviser, to form a so-called "angel investment network" to raise capital for new, promising businesses in Hampton Roads.

At the time, Nied said, "We want to show the old boys that we have some good things around here other than real estate."

Four years later, Nied now says that while there were meetings and presentations, the network fizzled out.

"It was an inauspicious time to start anything finance-related," he said. "The group sort of fumbled along. The general economic climate didn't help. People weren't inclined to start businesses, and people weren't inclined to invest when the economy crashed."

Angel investors in Hampton Roads may exist, but like their heavenly counterparts, their appearance is rare.

Every so often in Hampton Roads, angel investors - who focus on startups - and venture capital groups - which focus on companies that have a track record - make a splash, but then die out, said Bill Boyer, president of Tidewater CEO, a consulting and coaching group.

Boyer spent years in North Carolina matching venture capitalists with projects.

"There seems to be a lot of groundswell and a lot of interest, then it just dies," Boyer said. "It really puzzles me. I don't understand it."

Hampton Roads is home to its share of wealthy people, and Boyer wonders why more of them don't invest their money here.

"In North Carolina, there is a fairly good cross-section of angel investors or capital venture groups," he said.

Not so in Hampton Roads.

"To my surprise, when I started digging in here, I found a lack of venture capital or angel investing groups in the area," he said.

That's not to say that there aren't any. Envest in Virginia Beach was founded in 2000, and says it ranks among the top five private equity firms investing in Virginia, forming three limited partnership funds totaling $162 million in capital. It invests between $2 million and $7 million in private companies to take them to the next level.

Gary Oster, director of the Doctor of Strategic Leadership Program and Professor of Innovation & Entrepreneurship at Regent University, says that there are, indeed, angel investors in Hampton Roads - they just don't like to advertise.

In places like Chicago or L.A., angel investors tend to be flashy, Oster said.

In Hampton Roads, "they are just quiet about it, and they pay close attention to what they are doing. They are cautious, they are not flashy," Oster said. "They tend to be very conservative and they really think through their investments, but they are here."

Whatever the case, Nied said that he and his partners have changed their tack.

"We reached the conclusion that this area is rich in startups and interesting technology companies, but the angel investors weren't so bountiful," Nied said.

So now, Nied and DiNardo have formed Spark Route, which provides goods and services, rather than cash, for startups. Spark Route has teamed with We Are Titans, a technology group in Ghent, which is working with a Chesapeake entrepreneur who has invented an iPad application for autistic children.

Nied is providing the legal services. DiNardo is providing accounting services and We Are Titans is providing office and development services.

"Developers are the ones who are upping the initial contribution," Nied said. "The reason we are willing to take a gamble is if those guys are willing to risk the time and money, I'm willing to do the same." nib