“The Arizona Angels have rejected a number of applications from women entrepreneurs over the years because their ideas weren’t technology based or have a patent behind them,” Harris says. “So the point of the Catalyst Committee is to be supportive of entrepreneurs, particularly women, who have good ideas, as well as businesses that are not tech-based.”
Harris started building the framework for the Catalyst Committee about nine months ago. The group met for the first time in November 2008 and now has 35 potential women investors from around the state. During the kickoff meeting, the founders of three local startups talked to the group to provide an idea of the type of companies that could eventually apply for funding. High-end fashion designer Debra Davenport talked about the fashion industry in Phoenix, her couture collection, which she launched in November 2007 during Phoenix Fashion Week, and her hopes of one day raising $1.7 million that would allow her to participate in fashion shows around the world. She also showed a number of garments from her couture collection.
“Being able to participate in key fashion shows in Los Angeles, Miami, New York, Paris, Milan and London is a fashion designer’s primary marketing tool,” Davenport says. “But it’s not cheap. It can run anywhere from $30,000 to $100,000 per show when you figure in pattern making, fabrication, manufacturing and all the specialized notions, materials and threads that have to be brought in from places like Paris and Italy.”
Last year, Davenport was able to show her luxury collection during the Mercedes-Benz Fashion Week in Los Angeles. It’s the second largest and most prestigious fashion week in the United States next to New York Fashion Week. Davenport was also the first and only designer to show from Arizona, according to IMG, the production company that puts on the show. Now, Davenport was invited to show her fall collection during the most recent New York Fashion Week.
“I’m hoping that with the significant achievements we’ve been able to accomplish over the last 15 months, we will catch the eye of some savvy investment people who think this is a winning proposition,” Davenport says.
She is planning to launch her first signature fragrance later this year or in early 2010. She also plans to expand her design offerings to shoes, handbags and china patterns. The 50-year-old fashion designer has already completed designs for china patterns, shoes and luxury handbags that will be manufactured in Italy.
Kathie Zeider, senior vice president of Legacy Bank and a member of the Catalyst Committee, says there are many worthwhile businesses in Arizona like Davenport’s that serve women, or are women owned, and poised for high growth of $5 million to $50 million.
“We’re in a service and tech economy, so for Arizona to grow and prosper we need to nurture both sides of the economy,” Zeider says. “Kudos to Dee Harris for seeing this gap in the Arizona marketplace and developing an initiative to fill this need.”
Committee member Connie Jungbluth also believes early-stage investors are critical to the state’s economic vitality. “It’s important to infuse capital into early-stage companies in our community, especially in this economy,” she says. “Women are also big consumers, so overlooking businesses that serve them is not a good idea.”
The Catalyst Committee is still in search of investors to join the group. Its goal is to have 100 investors and to help one local startup company a month. Investors must meet state and federal accreditation standards. Individual investors need an annual income of $200,000 for the current year and the past two years. Couples require an annual income of $300,000 for the current year and last two years. A net worth of $1 million is also acceptable in lieu of the income standard.
Entrepreneurs can submit their applications and business plans to the Catalyst Committee via the Arizona Angels Web site. Harris says entrepreneurs seeking angel investment need to be well prepared when applying for funding; they need a strong business plan with important information aimed at investors.
“Angels are extremely interested in the management team that gives credibility to the firm, so oftentimes they read the first paragraph of a business plan, then skip straight to the management team because it’s so important,” he says. “They also want to know about the company’s marketing and sales strategy and whether the company has some type of competitive advantage.”