Convincing investors to back their company wasn't a high priority for Folium Partners' founders during the rush to create audiobook applications for the iTunes store last year.

Convincing investors to back their company wasn't a high priority for Folium Partners' founders during the rush to create audiobook applications for the iTunes store last year. They weren't even expecting such an opportunity so soon.

Given the opportunity to make their pitch on Wednesday, however, the Ashland start-up managed to convince two-dozen members of Southern Oregon Angel Investors 2011 they were the best bet to provide a healthy return and create local jobs. As a result, the company founded with $12,000 of capital and untold hours of sweat equity claimed the $155,000 prize at the inaugural Southern Oregon Angel Investment Conference.

It took a pair of nudges from local radio executive Ron Hren and Ashland Railroad Museum operator Victoria Laws for Folium to wade into the competition. "We were hearing it in two different ears, so we checked it out," said Folium partner John Lee.

Lee delivered the start-up's presentation Wednesday at the Rogue Valley Country Club.

The angel investment concept has taken off across the country and essentially matches small start-up companies in need of capital with investors willing to gamble on their success. Locally, 26 investors put up $5,000 each to provide the investment prize and eight companies made it to Wednesday's final rounds to make their pitch to a panel of venture capitalists and to the assembled investors.

Folium Partners plans to use the investment funds to market its existing products, as well as to extend into digital interactive publishing. The company also plans to expand its staff from nine to 17 during the next year, while developing existing ties with Southern Oregon University's computer science program.

"This allows us to take the next step in our software development," said Jay Tapp, a founding partner and chief strategy officer. "We're going to be smart with how we use this money."

The angel investment will speed things along much faster than originally planned.

The foursome of Lee, Tapp, Steve Christensen and Ben Bellinson initiated the venture in July 2009 and produced their first app for Blackstone Audio in February 2010. While the company came out $3,000 ahead in 2010, the partners augmented their income through royalties, a vineyard and consulting fees.

"With our combined business management skills we're truly bootstrapping ourselves," Lee said. "Ben and Jay had the marketing and business development side covered, while Steve and myself had the technical side."

In the beginning, Lee said, there was a problem to solve for people wanting to produce audiobooks and make them available through iTunes.

"We became aware that for an audiobook producer to sell books through iTunes they needed a relationship with audible.com, which meant a large portion of money went to audible.com," Lee said. "Our apps mean they would have more money in their pockets."

The investment dollars will advance production schedules, Lee said. "We'll market to our customers sooner and be able to hire technology people that will allow us to cross-platform sooner."

Folium Partners won out over 31 competitors, including four others who made it to Wednesday's final round: REDCloud, Cascade Peak Spirits, YogiTunes and Amalgamated Design's READY BOOK. Angel investment organizers say they hope some of the runners-up still will receive investments through connections they made in the competition.

Folium partner Bellinson was in Portland undergoing surgery during the conference but received messages from his partners shortly after the announcement was made.

"As soon as they announced it, I sent a text message," Lee said. "Steve sent a photo from his iPhone of the check, then Jay called Ben's wife, Linda. It's been a very big day for all of us."

The Angel Investment project was instigated by Steve Vincent of Avista Utilities and headed up by Tom Becker, managing member of Southern Oregon Angel Investors. Becker said they plan to continue the effort.

"We want to get more of the students from Southern Oregon University, especially the graduate students, involved in the process," Becker said. "We would like to have the graduate students in front of people, so they can learn to develop a business plan and be organized with a strategy. This was fun for the investor group, too, and I anticipate it will grow in the next year."

Four of the applicants for Wednesday's event, including two of the top four finishers, will be clients of the Sustainable Valley Business Accelerator, which will provide business start-up sites when it launches in early April in downtown Medford.

"It's a symbiotic fit with the Southern Oregon Angel Investment program," said Mark Von Holle, who heads up the Sustainable Valley project.

Reach reporter Greg Stiles at 541-776-4463 or e-mail business@mailtribune.com.