Indianapolis-based angel investor group eyeing ‘record year’ in 2023, executive director says

After a slowdown in 2022, the executive director of Indianapolis-based investment group VisionTech Angels says deal-making activity is once again improving.

Despite the economic uncertainty in the markets, VisionTech is “on pace to have a record year,” said the group’s executive director, Ben Pidgeon.

Established in 2009, VisionTech is an angel investing network that includes more than 130 individual investors who pay annual dues to become members of the group. Most members live in Indiana, Pidgeon said, but the group also has about 10 members in Ohio.

In VisionTech’s most recent deal, announced this week, 16 of its members invested a total of $190,000 in Seneca Therapeutics, a Philadelphia-based clinical-stage biopharmaceutical company that’s working to develop immunotherapies for cancer. VisionTech was one of several investors in the $2.8 million bridge round of funding, which was led by Seattle-based Keiretsu Capital.

The deal marks VisionTech’s second investment into Seneca. Its initial investment, in 2021, was $327,500, bringing its total investment in the company to $517,500.

Including the Seneca investment, VisionTech has made seven separate investments totaling $1 million so far this year, with another two deals expected to close in the next 45 days, Pidgeon said.

In comparison, VisionTech completed a total of 16 investments totaling $2.4 million in all of 2022, Pidgeon said.

Since its inception, VisionTech has invested more than $27.5 million in 63 companies across the U.S.

It may seem counterintuitive, but Pidgeon said the tech-sector layoffs of the past year are a reason for optimism when it comes to angel investing. Some percentage of the people who have lost their job, he reasons, will decide to start their own companies as a result.

“I think the rest of the year, and probably the first quarter of 2024, is going to be really interesting opportunities,” Pidgeon said. “These folks are going to be gritty. They’ve got technical experience.”

But Pidgeon also sees some reasons to be bearish.

In particular, he wonders how much more room for growth there is in the software-as-a-services, or SaaS, sector.

And a company that makes its money from software subscriptions may be vulnerable if customers decide to tighten their budgets and cut back on software expenses.

“I think there’s some fatigue in the SaaS model,” Pidgeon said.

About 45% of VisionTech’s investments are in software-as-a-service companies, with another 45% of investments in life-sciences companies. The remaining 10% of investments are in hardtech—a term that refers to technology that’s integrated into physical objects.