Five Questions With: Jennifer Schwall

Jennifer Schwall is the executive director of Cherrystone Angel Group, an angel investment group based in Rhode Island that last month was named one of the top three angel groups in New England.
Jennifer Schwall is the executive director of Cherrystone Angel Group, an angel investment group based in Rhode Island that last month was named one of the top three angel groups in New England.

Jennifer Schwall is the executive director of Cherrystone Angel Group, an angel investment group based in Rhode Island. The investment group last month was named one of the top three angel groups in New England, ranking second only to Boston’s Launchpad Venture Group. Schwall talks with Providence Business News about what it means to lead the angel investing effort in New England, how the group has grown and the level of interest from Rhode Island-based ventures.

PBN: Congratulations on being named among the top three angel groups in New England. How does this type of recognition feel given Cherrystone’s efforts over the years?
SCHWALL:
We are excited to be recognized for the great work Cherrystone has done over the years. Since our founding in 2004, we have invested in 24 companies across 70-plus investment rounds, experienced three positive exits and deployed more than $18 million in capital. The Halo Report was a great way to see how that activity stacked up against our peers in the New England region.

PBN: How many members do you have now, and what sort of feedback are you getting from them since being named?
SCHWALL:
We currently have 68 members within the group, and we are all very proud of the work we have done over the years. This recognition allows us to be viewed as leaders within the New England angel community, which has already changed the way our peer groups are viewing us. We always knew that we were doing something special here in Rhode Island, so the membership is pleased to have that recognized at a national level.

PBN: In New England there’s reportedly been a 12.7 percent increase in the number of angel investments in the last five years. Can you tell our readers a little bit about your growth over the years, both in investments and in membership, and how it’s contributed to that regional growth?
SCHWALL:
Since 2010, our membership has grown by 54 percent and collectively have invested $13.5 million in our portfolio companies. This has increased significantly from our 2005-2009 dollars deployed of $4.5 million. I joined Cherrystone in the summer of 2010, and since then, I have seen a dramatic increase in both the deal quality and deal flow within the New England region. Angel investing, as a whole, increased in popularity and the ability to seek investments from groups of angels has allowed companies to raise money more efficiently. We have been able to take part in that trend as our group has grown – both in size and popularity. Having a larger membership base has allowed us to bring more money to the table when we invest in a company, which has allowed us to tap into a richer pipeline of deals. This provides more options to our membership and in turn continues to increase the interest around joining Cherrystone and active angel investing.

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PBN: Although based in Rhode Island, Cherrystone also invests in other markets. Are there any plans to expand your footprint?
SCHWALL:
We like to say that we not only invest our money but also our time, and as a result, we have chosen to focus our investments on companies located from Maine to New Jersey. We primarily seek out opportunities in Connecticut, Massachusetts and Rhode Island where we have the strongest connections. We are lucky to be located in the second most active region in the nation for entrepreneurial activity – only behind California. We never say never, but for the time being, we will continue to focus on investing in companies located in New England or companies looking to relocate to New England upon our investment. This provides us the ability to be engaged with our portfolio companies on a monthly basis without having to jump on a plane to see them.

PBN: Are there many Rhode Island companies in search of angel investments, and how does it compare to other markets, such as Boston?
SCHWALL:
Boston is an epicenter for deal flow and entrepreneurial activity, so one would expect that we see more companies from Massachusetts than Rhode Island submit applications annually. However, I would say roughly 25 percent of our applications are from Rhode Island ventures. We are seeing trends as well from companies focused on the food and beverage market as well as the pharmaceutical industry (specifically around neuroscience). We like to be active partners in the community here and meet with founders on a weekly basis to discuss their ventures. We have immensely talented entrepreneurs in the state, and we are eager to see how the new initiatives brought forward by Governor [Gina M.] Raimondo will bring these talented individuals together to strengthen our state’s entrepreneurial ecosystem. Funny enough, I have begun to meet Rhode Island entrepreneurs in Boston at pitch events. This is an example of how we have great companies here who are doing great work, and we are now starting to leverage that to stitch together a stronger ecosystem. I hope the growth in regional activity as reported by the Halo Report is an indication of the growth we will experience here in the Ocean State over the next five years.

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