You Cashed Out In Florida... Now What?

Here’s our advice on the ‘next chapter’ for founders who’ve recently sold their companies in Florida.

You’ve put years of emotional, intellectual and sweat equity into building your business, and you’ve finally reached that apex moment; the day you sell your company and move on.

But now that the ink is dry on the contracts, your office is packed up and you’re hopefully a bit wealthier, what’s next?

It’s a critical crossroads that many Florida entrepreneurs face, and it is only navigated after deep reflection. You may want to build another business all over again, depending on the ideas, capital and energy you that you can marshal to drive that process. Or, you can focus on angel investing, helping to push innovative new Florida companies forward, while also enjoying attractive returns. You may also likely want to do both.

“When someone successfully exits their business, someone will ultimately approach them to collaborate on a new idea,” says Jon Cole, a new World Angels Board Member, Investment Committee Chair, and Vice President). “But beyond starting the next big thing, founders with an exit must also reflect upon diversification of their investments. Part of that strategy is to buy corporate bonds, but there’s a solid argument for developing an alternative investment component. Like real estate, venture capital investments in startups is one of those alternative investment allocations.”

Funds For Entrepreneurs, From Entrepreneurs

Florida angel investment groups such as New World Angels are typically comprised of high net worth individuals, including proven, successful entrepreneurs, looking to promote and profit from the next great wave of Florida startups. So if you find yourself missing the “lean and mean” days of your early career, early-stage investing is a rewarding way to recapture that excitement.

“I found myself looking back with fondness at my early stage and small company experiences and today hold deep respect for early stage founders,” says Ron Tarro, a former CEO and a New World Angels Board Member and Vice President. “Making investments and advising other founders is my form of giving back to the industries and region in which I built a company, all while developing a valuable personal investment portfolio.”

Tarro also notes that it’s important to remember that angel investing in Florida transcends just funding a business and recouping the dividends. There’s the potential to leave a lasting mark on our world by backing new founders and their products, services and technologies. “I have personally found that changing the world is not simply done by being charitable, but by creating the next generation of technologies and organizations that will improve mankind,” Tarro says. “How do you make Florida and the world a better place? By ultimately investing in profitable technologies and services that make it a better place. My investments can be good for the community, for the founders and team, and for for myself as an investor and advisor. There’s a lot of win-win-win out there.”

Joining Forces

While the idea of angel investing may seem an easy sell in theory, it can prove to be a difficult and confusing road for new investors. That’s why individuals are motivated to participate in investor syndicates like New World Angels , which pools the unique talents and skill sets of its members into a well-rounded venture capital collective.

“In seeking to develop a diversified portfolio of startups beyond my home industries, I’ve found that an ability to leverage diverse skills and experiences within an angel syndicate is super helpful; one person knows one industry, another person knows another industry, one person knows how to cut the legal deal, while another knows how to do the financial analysis,” says Tarro. “Within a group you can actively be a part of the investment process, unlike dropping your money into a mutual fund, and never doing another thing. In the case of angel investment groups like New World, we’re actually the ones making the decisions about what stocks go into the fund.”

Experts suggest that when investing in small companies as a minority investor, you don’t want to have one company in your portfolio, or even six for that matter, but rather 20 or more. This requires constant attention to sourcing of new businesses. Syndicates like New World Angels, accelerates the building a diversified portfolio for each investor by providing curated deal flow for consideration, while allowing you final decisions on each decision.

“It’s a portfolio game. You need to be able to build a relatively diverse portfolio of various types of companies across a range of industries,” says Cole. “Our goal in New World Angels is to be part of the solution for that, for people who have made an allocation—either formally or informally—of their net worth to invest in this area, or for those who just find it personally interesting.”

Cole added that this investing framework also provides an opportunity for individuals to build a portfolio of early stage investments in Florida relatively quickly, and through a greater level of investment than would be possible as a solo investor. That’s because angel groups pool their resources to save time on deal sourcing and generating opportunities, as well as when executing due diligence on those leads.

Addition By Addition

As an angel investor in Florida, you will also be providing more than just cash for your investments. When operating within a collective such as New World Angels, the wide-ranging expertise of the group only enhances the value of the businesses in which it invests.

As Cole explains, the process begins when the group’s pertinent experts help structure and negotiate investment terms and then the actual investment structure. Then, the group brings in board members and other advisors to provide added resources to the business.

“These professionals can provide real value for the companies on a go-forward basis,” Cole says. “It’s another way of pooling talent, as well capital, to create a portfolio opportunity for people who want to be more involved in investing in small private companies.”

All of these benefits add up to an attractive investment option for successfully exited founders in Florida seeking new endeavors, while also reaping the financial rewards of smartly managing their existing assets and liquidity.

“If you’re looking for what’s next, my take is to get involved in the next generation of businesses,” says Tarro. “There’s social good at every level, there’s financial return for you, and you can still golf, too.”