o_19grqq7snim9mn019q11f7ds26a.pdf

y diane alter
On a Roll: Investment in Start-ups
If the first quarter of 2014 provides
any indication for the rest of the
year, it appears this may be the
most fruitful year in more than a decade
for start-ups headed to making
initial public offerings. According to
a Thomson Reuters report, the time
period between the start of January
through the end of March marked the
largest amount of investment by venture
capitalists since the second quarter
of 2001.
That is welcome news to Brian Altounian,
president of Alliance Acquisitions
in West Hollywood, California.
His firm specializes in taking
start-ups through their growing pains,
attracting investors and making initial
public offerings. Just last month,
one of Alliance’s portfolio companies,
WOWIO, Inc., (OTCBB:WWIO) successfully
completed its march to the
public market and is now trading on
the OTC Market, providing an exit for
early-stage investors.
“In the last ten to 15 years, I have spent
a lot of my time in the early stage
start-up industry, working from the
perspective of building value in these
companies and creating a unique opportunity
for investors,” he said.
Despite the uncertainty still surrounding
implementation of the Patient
Protection and Affordable Care Act,
also known as Obamacare, Altounian
views its servicing needs as a hotbed of
opportunity. His thinking is directly in
line with reports from the Renaissance
Capital IPO Center, indicating that 55
percent of Q1 2014 IPO filings were
health care companies, and with Venture
Beat – an online magazine tracking
the activity of venture capitalists.
In February 2014, Venture Beat predicted
that digital health IPOs, already
outnumbering tech IPOs, will soon
also supersede them in value.
“Whether you think good or bad
about Obamacare, the reality is that
any company that can facilitate compliance
with the requirements of
Obamacare, the management of health
care, or anything to do with pharmaceuticals
is going to have success right
now,” Altounian believes. “Anything
that is helping to navigate the new
Obamacare line – that is what is hot.”
While the role of angel investors has
received a lot of attention in the past
few years, for Altounian they aren’t
necessarily the first direction
he turns toward when
seeking funding for a
start-up.
“Occasionally I find
a synergistic angel
investor with a particular
passion for
an industry in which
there is a company
we are working
with,” he said. “But
I really like working
with the smaller investors who have
discretionary income – such as successful
professionals who are accredited
and would like to dabble a bit to build
the “risk” side of their portfolio. (They)
have the penchant for a little higher
risk than what the average angel investor
tends to be able to swallow. Of
course, that’s usually where the greatest
rewards come from a well.”
Altounian is also closely watching the
future role that crowdfunding will
play in the development and funding
of start-ups. He knows the SEC has
provided initial guidance for the use
of crowdfunding, but doesn’t think
the agency is finished establishing the
rules.
“I love the idea of crowdfunding – and
that everybody is talking about it,”
Altounian said. But he believes too
many investors are hesitant because it
is a method or idea currently existing
without a full set of boundaries for the
playing field.
“No one wants to be shut down until
all the rules are established. It is something
we will want to use in the future
because it is a great way to introduce
your company to a broad selection of
new investors. However, until there is
very clear guidance and all the rules
are set in place, we just won’t use it
yet,” Altounian emphasized.
www.alliance-acquisitions.com
THE SUIT MAGAZINE p.61