Local angels help venture take flight; Mid-America Angels settles on Ventria for first investment
BYLINE: Charlie Anderson
Mid-America Angels, a local group formed earlier this year, made its inaugural investment -- $515,000 -- in Ventria Bioscience of Sacramento, Calif.
Although Ventria is not based in the area, Mid-America Angels found the deal hard to resist, given the company's upside potential and its decision to open a processing plant in Junction City, Kan.
"It's one of those swing-for-the-fences deals," said Joel Wiggins, CEO of the Enterprise Center of Johnson County and an organizer of the angel group.
Angel investors typically are individuals who provide early-stage money for startups. Mid-America Angels is a group of 45 wealthy individuals, many of whom are entrepreneurs.
Wiggins said the group liked Ventria because drawing some of the firm's operations to Kansas could have the ripple effect of bringing other life sciences firms to the state and more deal flow to Mid-America Angels.
Kansas Gov. Kathleen Sebelius, Agriculture Secretary Adrian Polansky and Kansas Technology Enterprise Corp. CEO Tracy Taylor all assisted in drawing Ventria to the state. The state hasn't disclosed the incentives offered to lure Ventria, but Taylor said KTEC has given Ventria a $500,000 loan to be repaid in five years.
In testimony before the Legislature last year, Taylor said Ventria was seeking $6 million in grants to build a production facility and $5 million to $10 million in money from private investors in Kansas.
Ventria CEO Scott Deeter, a Kansas native, declined to disclose how much the firm has raised.
Ventria will use the Junction City facility to process proteins for an oral rehydration solution used to treat diarrhea in children. Deeter said the company's competitive advantage is that it will produce the proteins in genetically modified rice rather than through traditional methods, such as fermentation.
"It's a method for really changing the paradigm of the affordability of the products," he said. "It really provides a platform for future products."
The Kansas City Business Journal first reported Mid-America Angels' interest in Ventria in its Aug. 11 edition.
Wiggins said that about 15 members of Mid-America Angels participated in the Ventria investment.
Few, if any, have life sciences experience, he said.
"I think what they really saw was a management team and a board and a company on the cusp," Wiggins said. "This could be a big return."
He said Mid-America Angels is negotiating with another startup that is based in the area.
If that deal closes, the group will have reached its goal of investing $1 million in its first year.
Mid-America Angels has received 81 applications for investments to date. A third of the applicants were able to make their case before a screening committee, and nine went through advanced due diligence.