At the Angel Capital Association (ACA) Summit in Austin in March, the Angel Resource Institute reported on angel group activity in 2001 in the first annual Halo Report. I found some of the results quite interesting. For example:
The sale of equity in private companies is regulated by the Securities Act of 1933, which requires that the company either register with the SEC or meet one of several exemptions (Reg D). A Private Placement Memorandum (PPM) is a special business plan defined to meet an SEC exemption. In most cases, those entrepreneurs choosing to raise capital using PPMs retain specialists (many of whom are lawyers) to write their PPMs – a rather expensive undertaking. Read more
Business plans come in several flavors and you will need each of them to successfully raise money. I’ll briefly describe the forms of your business plan, but more importantly, explain how to avoid common mistakes in using your plans. Read more
After participating in a seminar I delivered a couple of years ago, an experienced angel investor commented to me he would never write another check for $250,000 to a single startup. Instead his new strategy would begin writing checks for $25,000 to $50,000 for many companies.
Rob Wiltank’s study a few years ago validated what many angels have suspected for decades – angel investing is a high-risk asset class and that risk can only be reduced by investing in many startup companies. Here is what Wiltbank taught us: For every ten startups angels finance, we can expect the following outcomes: Read more
The typical angel investor is wealthy and about 60 years old – at a stage in their lives when golf, tennis, cruises and grandchildren are foremost in their minds. They could easily turn their investment decisions over to a wealth manager. Why would they choose to invest both time and money in startup companies? Why? Because they want to! Read more
The Funding Gap between typical angel rounds ($250-$750K) and average venture round of $7-8 million is really difficult to bridge. Over the past five years, angel group leaders have found that syndicating deals with neighboring angel groups and other early stage investors has several distinct advantages: Read more
Entrepreneurs are often surprised when investors refuse to sign non-disclosure agreements (NDAs) or confidentiality agreement when offered an opportunity to read the entrepreneurs’ new business plans. After all, every new startup features secret ideas, partnerships, intellectual property and/or technology.
