business

Discussing dumpsters over dinner isn't exactly romantic.

But that's how David and Sara Russick spent date nights in their budding relationship. Their passion for building a trash collection business later led to their 1997 marriage and to Bagster, a start-up so successful that Waste Management bought the company and its indestructible trash bags two years ago.

Now the entrepreneurial couple is on to a new love: being investors.

The Russicks launched Gopher Angels, an investor network that will recruit wealthy individuals to put at least $50,000 into Minnesota start-ups within two years. The network will address a dire need among local entrepreneurs who are struggling to raise money to fund promising innovations.

"We love being involved in start-ups and early-stage businesses," said co-founder David Russick. "We think we can bring expertise and know-how to these companies."

Gopher Angels will fund Minnesota companies involved in most industries, except for medical device and lifestyle firms. Medical device companies require too much of an investment and lifestyle businesses tend to not be high-growth.

With Gopher Angels, members will pay an annual fee of $950 and attend meetings where start-ups will make presentations in hopes of raising money. A University of Minnesota MBA student from the Carlson School of Management's entrepreneurship center will be hired to help vet presenting companies, and more students could be hired depending on need, Russick said. Gopher Angels hopes initially to have 10 to 30 investors and is now recruiting members.

Unlike a fund, Gopher Angels lets its members choose whether they want to invest the companies. In a traditional fund, members put in their money into a communal pool of capital and the group votes on which companies get the investment.

Joy Lindsay, who plans to join Gopher Angels, noted that difference as one of the network's benefits.

"If there's a deal that you don't really like as much, you don't have to participate," said Lindsay, who is on the network's board of advisers.

The downside for entrepreneurs is that the pool of funding is potentially lower because they may only get a couple of investors instead of the full group's money.

Marianne Hudson, executive director of the North American trade group Angel Capital Association, doesn't believe that will affect participation. The amount of interest from start-ups varies, and can be affected by the organization's reputation, she said.

Gopher Angels is based on Thunderbird Angel Network, an affiliate of the Thunderbird School of Global Management in Arizona. Since its start in 2010, Thunderbird has invested $125,000 in two companies. The Russicks were part of that network, and when they couldn't find something similar in the Twin Cities, they decided to start their own.

Networks represent 76 percent of all angel groups in the country, according to Angel Capital Association. Networks can be good for investors who like to make their own decisions, while angel funds may be ideal for new investors, said Hudson.

The Russicks said they believe their expertise as entrepreneurs can help promising companies become successful.

"We have a lot more sensitivity for the entrepreneur because we've been on that side of the table before," Russick said.

David and Sara Russick met at Plymouth-based Water Technologies Corp. in 1991 and remained friends as the two worked for various companies. David Russick launched TUBS, a mini-dumpster rental business, in June 1991. After the couple started dating, Sara Russick left her job at Recovery Engineering in 1994 to join David's company.

In 2005, the couple launched a business that later became Bagster, which sold tarp-like trash bags that could hold jagged wood and metal through retail stores. When the company was sold to Waste Management, it had a presence in 15 major metro areas across the nation.

The Russicks still own TUBS.

The couple said they are committed to respecting entrepreneurs, and even if they don't fund their companies, they plan to redirect them to other resources and offer them advice.

Twin Cities entrepreneur Scott Davis said he was happy to see another angel investor network. Davis' mobile game business "Qonqr" plans to start seeking capital later this year.

"It's exciting to see there are people out there looking to raise money and distribute it to the start-ups of Minnesota," Davis said.

Wendy Lee • 612-673-1712