Canyon Angels get their new sidecar fund moving

May 27, 2020 / by / 0 Comment
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Canyon Angels founder Tim Kelley is excited by what the added dimension of the sidecar fund will bring to the investor group. (Photo courtesy of Madison Louwen, Canyon Angels)

By Rick Vacek
GCU News Bureau

A sidecar is attached to a motorcycle and provides a wild ride.

A sidecar fund is attached to an investor group and provides another way to propel a portfolio from Point A to Point B.

Jerry Colangelo was the first investor in the Canyon Angels’ new sidecar fund. 

The Canyon Angels have gotten their sidecar fund rolling, and their sidecar investors – the first one was Arizona business icon Jerry Colangelo – had an added advantage: They could see the company they invested in firsthand because it’s stationed in Canyon Ventures, the innovation center on the Grand Canyon University campus.

Its name is ICT Tracker, an augmented-reality software company that helps track construction progress on a job site. Canyon Angels investors backed the startup with $105,000 split three ways: The sidecar fund contributed $25,000, matching the dedicated funds of members who came together to form a dedicated LLC. Also, two members invested directly.

“This is the first time that we’ve had all three of our investment mechanisms utilized on one deal,” said Tim Kelley, Assistant Professor for Entrepreneurship and Economics in the Colangelo College of Business and founder of Canyon Angels.

“The reason it’s important is that each of those different mechanisms allows for different investors to invest in different ways to get engaged in early stage financing of these entrepreneurial ventures.”

How it works at GCU

Startups often have to depend on investments by the founders or their families just to get off the ground, and then it takes angel investors – equipped with handy vehicles, such as a sidecar fund – to keep the idea going upward.

At GCU, it creates a circular model: More startups with access to funding promotes more investment, which in turn can attract more startups to Canyon Ventures.

Andrew Flowers (left) and Connor Keene display their $3,000 certificate for finishing second in the Canyon Challenge in March 2019.

The concept of the sidecar fund is simple: It’s for members willing to trust the sidecar fund managers to invest their money. But unlike direct investments, which require a minimum of $25,000, the sidecar requirement is only $5,000.

“You can build a portfolio and get multiple companies in your investment portfolio without having to cut big checks,” Kelley said.

He sees the sidecar as yet another vehicle for growth in the Canyon Angels, whose membership recently climbed past 70. The group has been busy – its May meeting was a virtual get-together with the Texas-based TEN Capital Network and included 25 members.

Each group brought in two companies to be considered, and GCU students did due diligence for the two Canyon Ventures startups – including i-calQ, which has developed and tested a mobile lab platform that uses smartphone technology to provide point-of-care lab testing, a particularly useful concept in the COVID-19 fight. Two GCU students have been hired by i-calQ.

“Our GCU students are working straight through this COVID crisis,” Kelley said. “Even after the semester ended, they’re still engaged and making this happen. That’s a good thing.”

Kelley also has brought on board two students to help him manage Canyon Angels – Andrew Flowers as President and Connor Keene as Vice President. Both have been active in entrepreneurship at GCU and founded a startup of their own, Greatr Media.

Flowers said of Kelley, “You couldn’t ask for a better mentor. It’s the life lessons you learn. He has a wealth of knowledge.”

Kelley also has knowledge of construction, an industry in which he worked for more than a decade. That’s why he’s excited about ICT Tracker.

“You can have a digital plan and compare that to what’s actually being built,” he said of the new app. “Being able to have that information, real time, overlaid onto an actual construction site is super-cool, cutting-edge technology.

“You have a convergence of technologies that’s now making this possible. So much of it has to do with the increase in sensor technology and the affordability of cameras and the processing power of all our mobile devices.”

The story of ICT Tracker

ICT Tracker was founded by Tim Duncan, David Francis and Lisa Duncan and fulfills an important gap in the construction industry, which has been slow to embrace technology. Tim Duncan said he was spurred onto the idea by a scene he saw at a construction site:

“I saw some guy running around with a set of bluelines and highlighters. He was looking up, seeing what was done, marking the drawings, and then he took those drawings back to the job trailer and took out an architectural scale – a plastic scale. He was measuring the pieces, putting that into Excel and then mailed that off to the project manager.

Tim Duncan

“I told David, ‘That has got to be one of the most insanely inefficient ways of doing things.’”

Like other Canyon Ventures businesses, ICT Tracker has hired a GCU student – graphic designer Remy Velarde.

“He’s been absolutely exceptional,” Duncan said. “As soon as he gets his diploma, he’ll have a full-time job on our staff. Very talented individual.”

He’s also grateful. Velarde was hired in mid-March, just as the pandemic was beginning to shut down America and take away jobs, and is working full time during summer break.

“It was a blessing, it really was, because I know a lot of people were struggling to get jobs during that time period, myself included,” said Velarde, who expects to graduate in December.

Put it all together and it reflects the circular benefits of merging Canyon Angels with Canyon Ventures. Students and investors both benefit.

“It’s about growing the investor community and being able to fund exciting entrepreneurial ventures here in Arizona,” Kelley said.

And making it a smooth ride.

Contact Rick Vacek at (602) 639-8203 or [email protected].

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Related content: 

GCU Today: Investors see the value in Canyon Ventures Center

GCU Today: Student input helps Canyon Angels take wing

GCU Today: Innovation Center offers a lot, including students


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