Naples Angel Fund Posts Big Win for Investors
Naples Angel Fund Posts Big Win for Investors
Tamiami Angel Fund III investors notched the highest return on an investment since the fund’s inception.
NAPLES, Fla. (Jan. 25, 2018) — Tamiami Angel Funds scored an investment win recently when one of the firms it invested in was acquired by a publicly traded company.
Naples-based Tamiami Angel Fund III reported internal rate of return of 32% on investment in iScribes after publicly traded Nuance Communications acquired it. The fund invested $265,000 in the transcription service for physicians in July 2017, about four months before the company was acquired for an undisclosed amount later in 2017.
“Our investment in iScribes was the kind of home run that angel investors want to hit when they invest in early stage companies,” says Timothy Cartwright, chairman of Tamiami Angel Funds. “Angel investors take significant risk on early stage companies with the understanding that only a few will reach successful exits and we are proud to say this was one of them.”
iScribes equips physicians with a mobile app and wearable technology to record patient visits, enabling trained virtual medical scribes to complete all necessary medical documentation. iScribes has incorporated leading security features to ensure that their technology is 100% HIPAA compliant.
iScribes began out of the frustration of co-founder, Dr. Jared Pelo. “Once I started practicing medicine, I quickly saw how burdensome documentation had become. Doctors were burning out. Counterintuitively, technology didn’t seem to help. In fact, the adoption of widespread electronic medical records just made matters worse for overworked doctors, nurse practitioners and physician assistants.”
Then Dr. Pelo found something that fixed the problem. “My first medical scribe was a breath of fresh air. I knew every doctor should have one. But I also knew it would take technology that worked seamlessly to make scribing accessible,” says Dr. Pelo.
Dr. Jared Pelo notes: “Tamiami Angel Fund invested at a critical juncture in the growth of the company and in addition to the investment offered sage business advice.”
Angel investing is an important source of financial support and mentoring for new and emerging-growth businesses such as iScribes. These investors help entrepreneurs before they seek venture capital but after they’ve exhausted money from friends and family. Angel investors typically are wealthy individuals or families who have the means to risk their capital and give freely of their time to mentor entrepreneurs in the startup phase of a business.
Headquartered in Naples, Fla., Tamiami Angel Funds now consist of three member-managed funds that allow high-net-worth individuals and families to invest in promising early stage and expansion-stage companies located in the U.S., with a preference for those in the state of Florida.
Tamiami Angel Funds invested in iScribes as part of network of funds that belong to the Angel Capital Association, a national organization of angel funds. Co-investors included The Launch Place Seed Fund, Triangle Angel Partners and NW Tennessee Angels. “We’re helping put Florida on the map for entrepreneurs seeking capital for their promising startups,” says Cartwright.
“We have had a strong relationship with Triangle Angel Partners for multiple years and it was beneficial for both of us to add Tamiami Angel Fund III into the investor pool,” says Eva Doss, president and CEO of The Launch Place.
About Tamiami Angel Funds
Tamiami Angel Fund I, Tamiami Angel Fund II, and Tamiami Angel Fund III are member-managed funds that allow high-net-worth individuals and families to invest in promising early stage and expansion-stage companies located in the U.S., with a preference to those in the state of Florida. The funds are members of the Angel Capital Association and the Florida Venture Forum. For more information, visit www.tamiamiangels.com.
Tamiami Angel Fund wins big for investors
A bet on a health tech company has netted a healthy return for investors in a Naples-based fund.
The Tamiami Angel Fund III reported its highest return on an investment with the sale of iScribes, a medical transcription service for physicians, to a publicly traded company.
The fund — the third for Tamiami Angel Funds — invested $265,000 in iScribes in July. Less than six months later, the young company was acquired by Nuance Communications, a multinational computer software technology business headquartered in Massachusetts that provides speech and imaging applications.
The sale brought the fund's investors an internal rate of return of 32 percent, which takes into account the present value of future payments, said Tim Cartwright, chairman of Tamiami Angel Funds.
"This is the fifth acquisition or recapitalization transaction we've had out of our 17
portfolio companies across the three funds and our highest return to date," he said.
The actual profit is about $137,000, and most of it has been paid out to investors, Cartwright said.
"About 80 percent of the returns have been paid out to us," he said. "The majority of the deal has already been realized. Over the next two years we will get the payments out of escrow and earn-out."
iScribes was born out of the frustrations of its co-founder Jared Pelo, an ER doctor who found it a pain to complete all the documentation his hectic job required. His company offers a mobile app and wearable technology that allows doctors to record visits with patients — and provides virtual medical scribes to decipher the information and complete the documentation, while remaining compliant with HIPAA privacy and security rules.
"Once I started practicing medicine, I quickly saw how burdensome documentation had become," Pelo said in a news release. "Doctors were burning out."
The documentation is loaded right into the patients' medical records and it's ready to view by noon the following day.
iScribe, based in North Carolina, sought money from the Tamiami Angel Fund to crank up its marketing and to recruit more scribes.
"They actually grew their revenues by about 25 percent during the period that followed our investment, which is meaningful," Cartwright said.
Tamiami Angel Funds was one of the largest investors in iScribe. After the company made its "Shark Tank-style" pitch to the fund's investors, there was a supermajority vote to consider the opportunity, and after more research there was a unanimous decision to invest in it.
"Tamiami Angel Fund invested at a critical juncture in the growth of the company and in addition to the investment offered sage business advice," Pelo said.
Angel investors help entrepreneurs before they seek venture capital, but come in after the startups have exhausted the money their founders rounded up from friends and family. These early investors put in their own money and work with companies to help them succeed.
Money is still being raised for Tamiami Angel Fund III, and only about 25 percent of the money raised so far has been spent, Cartwright said.
The fund is at $4.2 million, and Cartwright expects it to grow to $5.5 million to $6 million.
"So we still have a lot of investment activity in front of us," he said.