University student angel investors close first deal

Student-run program empowers students to invest in local companies

(April 19, 2012) The University of Missouri Trulaske College of Business Student Angel Capital Program (SACP) announced the close of its first deal today. The Missouri company selected by the student-run program is Eternogen, maker of Dermelle, a collagen-based dermal filler for use in cosmetic surgery. SACP will invest $30,000 in equity as a member of Centennial Investors. The UM System announced in February an investment in Eternogen, as well.

The Student Angel Capital Program (SACP) is a cross-disciplinary, student-managed angel investment fund that allows undergraduate and graduate students of the University of Missouri the opportunity to learn angel and venture capital investment strategies through the first-hand experience of investing in high-growth Missouri start-up companies.

"Our students are experiencing a truly innovative approach to angel investing," said William (WD) Allen, Assistant Professor of Finance and Student Angel Capital Program Faculty Advisor, "Though I provide oversight as their faculty advisor, the students are running the show. Because of this, our students experience a unique opportunity to decide the fate of a pitch. This program is on the cutting edge of business education."

A grant from the Ewing Marion Kauffman Foundation, along with contributions from other private donors, gives the SACP funds to invest in start-up companies. Students learn about angel investment strategies through a balance of case studies, academic literature and deal flow from actual companies seeking capital. Students invest in high-growth start-up companies by cultivating deal flow, performing pre-screening duties, completing due diligence, and structuring investment contracts. After an equity position is taken, students monitor portfolio holdings and harvest investments. Returns on investments are retained in the assets under management, ensuring a system of ongoing financial support for the program.

"As a business student, I am looking for opportunities to learn both inside and outside the classroom. SACP combines the best attributes of this approach – we study angel and venture capital investing strategies and then we actually do the investing. To hear pitches from real entrepreneurs seeking capital, perform due diligence and make the investment is academically beneficial and very rewarding. It’s completely student run and provides us a unique opportunity," said Katie Chitwood, student co-president of SACP.

"The Student Angel Capital Program empowers students to take ownership of our education. I think the strength of our program comes from the diverse backgrounds of our members. By attracting high achieving students from across campus, our discussions on each deal incorporate many perspectives and students are expected to bring their opinions to class. Our novel approach builds a level of teamwork I have not seen in my other classes," said John Field, student co-president of SACP.