A Toledo group of "angel investors" has invested more than $1 million in five start-up firms in its first two years, supplying some of the area's only venture capital.
One recipient of funds from CoreNetwork is American Broadband & Telecommunications, a two-year-old Sylvania firm that provides Internet and telephone service to rural and suburban areas of northwest Ohio and southeast Michigan.
"They gave us the working capital to really accelerate our growth," said Jeff Ansted, president. "We were able to expand our market from 1,000 households to more than 5,000."
Bob Savage, Jr., managing partner of CoreNetwork, said yesterday he hopes the group can invest in 15 more start-ups and grow from 50 investors and eventually provide funding of as much as $2.5 million for a single company.
The investors are local business people and others with high net worth or high incomes who are looking for a different type of investment.
The recipients often are businesses or entrepreneurs who may have trouble getting a traditional bank loan.
"We're filling a funding gap," said Mr. Savage, founder of Savage Consulting in East Toledo.
Local economic development officials say the region has historically had a shortage of business start-up funding, especially after a local organization, the Northwest Ohio Venture Fund, used up its $15 million stake in the 1990s.
However, other venture money is on the horizon.
Steve Weathers, newly named president of Toledo's Regional Growth Partnership, said yesterday he hopes to have the group's In4 Fund running by year's end.
That long-discussed fund should have $2 million to $5 million to fuel the startup of six to eight firms, according to a plan prepared for the agency this year.
The growth partnership will begin soliciting funding for it soon, Mr. Weathers said, calling the fund initial seed money for new companies. He said he has talked to "angels" in such places as San Diego and Tucson, hoping to interest them in investing in this region.
Three of the five investments by CoreNetwork went to firms in the immediate Toledo area, including undisclosed amounts to the Sylvania company and another to one in Toledo, Mr. Savage said.
The investors put up about half of a $750,000 investment in Gateway Defender LLC, a Toledo provider of services to combat computer viruses and Internet spam, he said.
The network provided hun-dreds of thousands of dollars, he added, as part of larger financing packages for Accuri Instruments, a medical-instruments start-up in Ann Arbor, and SealPak Inc., a fledgling automotive-aftermarket supplier in Columbus.
The investors in the group are from metro Toledo as well as outlying communities such as Bowling Green, Findlay, and Bryan, Mr. Savage said. One is from Ann Arbor and another from Denver.
About 30 of the investors typically gather every couple of months in downtown Toledo for an early-morning or after-work meeting with a couple of prospective borrowers. Dozens of firms presented their business plans for review last year, Mr. Savage said, and about 100 are expected this year, each paying $150 for the review.
Investors who opt in to a particular project typically put up $10,000 to $100,000, with the average $25,000, he said.
The deals usually involve a loan convertible later into stock, or preferred stock that pays a dividend of 6 to 8 percent annually.
The organization also gets money from six founding sponsors and is hoping to add two more sponsors.