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Sandra Stone, chairwoman of the Maine Angels Investment Network, isn't afraid to roll up her sleeves to fill a void, whether it's starting a lacrosse team in Falmouth or matching entrepreneurs with investors who can provide money and business expertise.
Over the past two years she's applied that energy, foresight and ability to bring people together to Maine Angels, a group of people willing to invest in promising startups. Her work helped propel the group into the Halo Report's Top 10 list of angel deals made in 2012 and increased its membership from 31 to 62. The deals for last year amounted to $3.4 million, of which $1.5 million was in Maine. The collective investment of Maine Angels is close to $10 million in 42 early-stage companies. Investments include cleantech company Cerahelix of Orono, personal wind turbine maker Pika Energy of Gorham and tidal energy company Ocean Renewable Power Co. of Portland.
Athletic and with a broad smile, Stone, 58, describes herself as a private person who before Maine Angels wasn't accustomed to the limelight. She also says she's active and high energy. Those who know her work credit her with increasing the visibility of, and active membership in, Maine Angels. They say she's invigorated the group. Stone has made other improvements as well, such as updating the group's website and making her appointment to Maine Angels contingent upon members signing a due diligence treaty among angel investors. The treaty helps angels share due diligence information without liability, and she has pushed the adoption of an investment management software platform used by many other angel groups.
Upon taking the helm of the angels in September 2011, Stone found the Maine Angels had a reputation for being difficult and tight with the purse strings.
“Entrepreneurs are attracted to engaged investors,” says Stone during an interview at her Cumberland Foreside home office. “The perception was that Maine Angels made you jump through enormous hoops, wait six months and then gave you $5,000. The feeling was it wasn't worth it.”
She worked to reverse that. Now, the average investment is $25,000 per angel, with at least three members interested.
Stone, who also heads consultancy Sea Cove Solutions, works in an inviting Maine setting, her office overlooking Broad Cove and Cousins Island, a hedge of high-bush blueberries visible through the windows. Guests are greeted by a basket of collected sea glass on the front porch and enthusiastic barks from her Labradoodle, Maddy, and her boyfriend's Samoyed, Suddy.
As the new head of the angels group, she noticed only 19 of the 50 members at the time actually invested.
“We wanted to reaffirm interest,” she says. “We initiated dues of $170 per year. It helped us weed out 17 members.”
Initially, the ranks of the group fell to 31, but Stone actively sought members to recoup and surpass the former membership number. And she continues to do so, asking members to invite guests to meetings, for example.
“We're converting more than 50% of the guests to members,” says Stone, who doesn't get paid for her Maine Angels work. “I follow up with them and provide a link to apply for membership online. This isn't a secret club.”
She's also seeking to boost female membership, which now stands at six. Investors must be accredited. In addition, three Bangor investors are trying to set up a Bangor sub-chapter of Maine Angels.
She has reached out to collaborate with other angel groups, mainly in New England and more specifically, Massachusetts, where most of the Maine Angels' 21 deals last year were done. Six were in Maine.
Before Maine Angels, Stone spent six years at the Maine Center for Entrepreneurial Development building strategic partnerships.
“I like being around innovation and entrepreneurial thinking,” she says. “I get jazzed up. I'm a connecter,” adding that her experience selling real estate helps her bring people together.
A graduate of Bowdoin College with a focus on economics and government/legal studies, Stone is on the advisory board of Women Standing Together for Entrepreneurship and Leadership, a nonprofit spinoff of the Maine Women's Fund. She is the past state co-chair and a current member of Maine's EWeek Coalition, the state's recognition of National Entrepreneurship Week every February. She's about to become president of an out-of-state foundation, and intends to continue with Maine Angels at the same time.
When it comes to entrepreneurship, she's no slouch herself. Years ago, when her son, now 29, was in middle school, he wanted to play lacrosse, but Falmouth didn't have a team. She formed a partnership with a coach at Governor Baxter School for the Deaf on Mackworth Island, which had a playing field and a lacrosse team, and soon helped co-found a lacrosse league. At the end of two years, the league had played 81 matches and involved 26 athletic directors.
“I went back to the Falmouth school board and said, 'I've shown it will work.'” Her work convinced school officials to create a lacrosse program in time for her son to play in high school.
Stone has worked in real estate, banking, the nonprofit sector, with charitable organizations, in education and in commercial fishing, with her ex-husband. Together, they owned North Atlantic Inc., starting with one fishing vessel catching groundfish, then grew to two, and then three, eventually landing a contract with Hannaford Supermarkets. She no longer is involved with the company.
Stone counts among her mentors Chris Speh, previous chair of Maine Angels, who taught her that the significance of a good leader is how he or she develops those around them. Speh also convinced her to become chair of Maine Angels, which she first joined to learn how to make smarter investments. Also, Don Gooding, executive director of MCED and vice chair of the Maine Angels, taught her to use her time more wisely.
“I thought I had to meet everyone's requests,” says Stone. But she finally hired a paid administrator for Maine Angels.
She also points to a female role model, Sheryl Schultz of the Golden Seeds in Boston. That group invests in female enterprises or those with female executives who own a certain percentage of the company.
While Maine Angels enjoyed a banner year in 2012, the expiration in January 2013 of the Maine Seed Capital Tax Credit Program, which reached its $30 million statutory limit, dampened this year's investments to date to $300,000.
“Everyone knew the Maine seed tax credit would expire, and there was a rush to get deals done before it did,” Stone explains. “The seed capital tax credit was an opportunity to have investment with 60% credit, meaning you have only 40% at risk. It increased the willingness [of investors] to put more in than otherwise. It was a big boon to companies.”
For companies that are at too early a stage for bank loans, angels can be a lifeline.
“With the right capital, you can completely change the on-ramp [for the company],” Stone says.
She says angels still invest in companies, but it's harder. “Angel investing is high risk,” says Stone. “Three out of 10 deals give you a big return, three are flat like a bank rate [return] and three bottom out.”
The Maine Angels bylaws allow a two-year term for a chairperson. “I'm up for re-election in September,” she says. “I'm willing to run again. We're in a good place now and it's getting better.”
She sees a rosy road ahead for innovation in Maine.
“There's cool stuff here. It will take time, but it will grow,” she enthuses. “There are exciting things happening that you don't imagine being in Maine.”
Correction: This version of the story contains a correction and amplification to Maine Angels' 2012 investment totals.