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Angel Builders

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  • | 9:36 a.m. May 18, 2012
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Naples is about as far from Palo Alto, Calif., as you can get, but David Diamond knows his way around Silicon Valley's technology capital.

Diamond and business partner John DeAngelis are better known for their successful Naples-based firm DeAngelis Diamond Construction, the fourth-largest commercial construction company on the Gulf Coast from Tampa to Naples.

But here's what you may not know about the two men: They love to invest in startup companies and help promising entrepreneurs. “It's actually my hobby,” says Diamond. “I don't golf, I don't fish.”

Through their venture firm,, they invest $50,000 to $250,000 of their personal wealth in promising technology ventures, many of them only available to Silicon Valley insiders.

StartupAngel recently scored a big win when Google acquired a startup they funded called Just Spotted, which let fans track celebrities via the Internet. “Returns are way better than the stock market,” says DeAngelis.

Recently, the pair launched a project called Venture X in Naples, a place where budding entrepreneurs and freelance workers can gather and collaborate. Located in the chic Mercato shopping center, members pay a monthly fee like a gym and can come and go as they please in open office space that promotes interaction. When it opens later this year, the 8,000-square-foot space will have organic coffee, super-fast Wi-Fi, desks, conference rooms, lounges, a cafe-style kitchen and personal storage.

You can tell that helping others achieve entrepreneurial success is their passion because they're as excited about Venture X as they are the latest multimillion-dollar construction project. “It's what we love doing,” Diamond says.

Diamond, 49, and DeAngelis, 43, are in a unique position to understand the challenges and opportunities of entrepreneurship. When they started their construction firm 16 years ago, there was no turning back: The partners quit their jobs and mortgaged their homes for $90,000. This year, they project the firm's revenues to grow to $123 million, 38% higher than 2011.

With their construction firm's revenues growing at double-digit percentage rates in the last three consecutive years, Diamond and DeAngelis sidestepped the recession that felled competitors and smartly focused on areas they excelled at: health care facilities and renovations. DeAngelis explains success this way: “Everything boils down to people.”

No debt, no outsiders
From the time they launched their construction company in 1996, DeAngelis and Diamond decided to grow their company without debt or outside investors. Both men had been project managers with Boran Craig Barber Engel, one of the leading commercial builders in Naples during the boom.

Devout men, DeAngelis and Diamond founded their company on Christian principles, something they tout in their marketing. “We're very open about our faith,” says DeAngelis, who plays lead guitar at Summit Church near Florida Gulf Coast University.

Throughout the company's growth, DeAngelis and Diamond built the company's bond-insurance capacity so they could handle ever-bigger projects. Currently, their bonding capacity is $100 million, a reflection of their solid financial footing.

The firm hitched its success on other successful ventures in the area. For example, the firm has done work for Arthrex, the fast-growing medical manufacturer in Naples that posted more than $1 billion in revenues last year. “The team they've put together is one of the best out there,” says David Bumpous, director of operations at Arthrex. “When you work with them, you don't feel like you're working with contractors.”

To develop and retain the best people, DeAngelis and Diamond have granted eight people minority partner status while maintaining majority control of the company. “It's key for retention,” says DeAngelis. “We want them to be like-minded to us.”

Key employees must demonstrate loyalty to the company for at least five years before being considered for partnership. When they become partners, they buy into the company and share in the profits.

Those who work with Diamond and DeAngelis say that entrepreneurial culture permeates through the entire organization. “Everybody within the company is their own entrepreneur over the projects they manage,” says Reggie Morgan, CEO of DeAngelis Diamond Healthcare Group. “That's their management philosophy.”

Health care and renovations
During the real estate boom, DeAngelis Diamond built its share of condos and shopping centers. “When the market tanked, we started really focusing on health care,” says Diamond.

Turns out, Morgan had an extensive background in health-care construction even though he was building condos during the boom. “The thing about health care is it's really specialized,” DeAngelis says. “We learned quickly that we didn't really want to dabble in it.”

Operators of hospitals and other health care facilities demand contractors who work exclusively for that industry because the rules governing patient safety are so rigorous. For example, doing renovations while doctors are operating and patients are recovering takes special skill.

So DeAngelis and Diamond created a separate health care entity to focus exclusively on this sector and appointed Morgan to head it. The health care company now accounts for just more than half of the entire firm's revenues. “You have to live, breath health care,” DeAngelis says. “They really want a contractor that does it only.”

“It's like changing a wheel on a locomotive,” says Allen Weiss, president and CEO of NCH Healthcare System, which helped DeAngelis Diamond break into the industry. “We can't stop.”

DeAngelis Diamond recently built a 76-bed psychiatric hospital in Fort Myers called Park Royal Hospital in just less than a year. “You don't build these kinds of facilities in 11 months if it's not military timed,” says Mike Metcalf, the president and CEO of Park Royal. “These guys really run a heck of a show.”

Metcalf says some less scrupulous builders bid projects on thin margins and make their profits on change orders during the construction process. “We actually came in under budget and without a single change order,” says Metcalf. “These guys were very open book.”

Meanwhile, DeAngelis Diamond over time had gained a reputation for building high-profile buildings from the ground up. They started out doing renovations when the company was young, but over time fewer customers called for those smaller jobs.

However, renovation work became more important during the downturn because there were fewer new construction projects on the drawing boards. So DeAngelis Diamond started a company in 2006 called Build that focused on renovations and tenant improvements. With the recovery under way, Build delivered $8 million in revenues in 2011 it projects $25 million in 2012.

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DeAngelis and Diamond are as conservative with their own personal finances as they are with their company. Instead of spending their money on expensive hobbies, they save their money and invest it in other entrepreneurial ventures.

At first, the two men invested in traditional stocks and bonds, but they found that investing in startups was rewarding for more reasons that money. “We found better ways to invest,” Diamond says.

Through a business called, DeAngelis and Diamond invest in promising startups, mostly in Silicon Valley. Diamond travels there regularly to network with other angels and check out new ventures.

In Silicon Valley, Diamond attends an event called “Demo Day,” an exclusive confab that brings venture capitalists and promising startups together. It's not open to just any investor; “You have to earn it,” he says.

Through their investments, DeAngelis and Diamond operate on the assumption that not every startup will be a home run. The rule of thumb, they say, is out of 10 startups two will be big winners, two will fail and six will fare about average. DeAngelis says they've found that the successful entrepreneurs are the ones who have put everything on the line for their venture, including their own time and savings.

Now, they're hoping that Venture X in Naples will breed a new crop of startup entrepreneurs closer to home. “We wanted to bring that here,” says Diamond, whose son Brett Diamond will be leading the effort.

“The goal is to have hundreds of members,” says Diamond. The idea of a collaborative workspace with gym-like memberships is that it brings together solo entrepreneurs together for networking. “Work for yourself, not by yourself,” Diamond says.

What's more, Venture X will take an entire floor of the Mercato shopping center, a fashionable plaza with hip restaurants, movies and shops. “It's a great place to meet your clients,” Diamond says.

If Venture X is successful in Naples, Diamond says he might consider building others on the Gulf Coast, in places such as Tampa. “We've never been more excited about the future of this area,” he says.


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