The importance of angel investment, and its benefit to the community, were evident in the recent exit of the angel investment fund, Fund for Arkansas’ Future (FAF). The Fund exited its investment in Apptegy, a thriving local Educational Technology (EdTech) company, and will disburse over $3 million for its members.
Founded in 2015 by Jeston George, Apptegy currently employs 300 people and supports customers nationwide. With current growth trends, the company expects to employ 700 in a few years. This achievement would not have been possible without the initial angel investment from FAF through its second fund, FAF2. As FAF2 exits from Apptegy, it is able to return to its members a high multiple of their initial investment. The benefits of the investment are three-fold: the creation of an impressive number of well-paying jobs, significant income for investors and improved communications tools for school districts nationwide – wonderful results for an Arkansas company supported by local angel funding and a supportive entrepreneurial ecosystem.
The roots of FAF go back to 2004-05 when Dr. Mary Good, John Steuri and Dr. James Hendren decided to form an angel investment fund to fill a need in Arkansas. The informal mission statement was “Do Some Good, Have Some Fun, and Make Some Money.” Hendren and Jeff Stinson, who became the FAF executive director, did “a heroic amount of work” in raising over $6 million from 57 investors. From 2005-12, the fund invested this money in 18 tech-based startups. There were significant exits and four continuing investments. A second fund known as FAF2 was launched in 2013. That fund has 65 investors and raised about $5.5 million, a portion of which was invested in Apptegy and the remainder in other startups. FAF2 has yielded positive returns to investors, and more are anticipated.
Although FAF is no longer making investments, its pioneering work has led to a number of other significant Arkansas-focused angel funds. Also, the Ark Angel Alliance, an angel group rather than a fund, is open to new members and new startups.
