Why Investors join an Angel Investor group or network

Solo Angel Investing is Time Consuming

Individual angel investors have little support for due diligence, deal structuring, diversification through co-investing and then post investment collaboration all the way to a exit. These are the challenges:

  • Sourcing of good quality deals takes time
  • Meeting entrepreneurs takes travel and meeting time
  • Reading investor packages is time consuming  
  • Due diligence is usually 40+ hours per deal
  • Need opinions from friends and industry experts 
  • Term sheet negotiations
  • Legal hurdles and cost
  • Post-investment management

 

Improving Angel Returns

A number of studies in recent years point to ways to improve return on investment.

Tracking Angel Returns, Wiltbank and Brooks, November 2016:

  • Angel groups average 2.5x return (22% IRR) and 4.5 years before exit
  • 30 percent of exits returned more than the orginal investments
  • 10% of all exists generated 85% of the returns
  • Bigger wins take 9-10 years to exit

 

Returns to Angel Investors in Groups, Wiltbank and Boeker, November 2007:

  • Time spent on due diligence translates in better investment outcomes
  • Investors who spent more than 40 hours saw a 7.1 multiple
  • Investors who spent 20 hours a 5.9x and less than 20 hours a 1.1x
  • High industry expertise in the area of the invested venture delivered twice the returns
  • A higher interaction with portfolio companies delivers a higher exit for 3.7x
  • A lower interaction of a couple of times per year delivered 1.3X

 

Join the Angel Forum to Collaborate

  • Pre-screening improves quality of deal flow
  • Dividing up due diligence work eases the pain of 40+ hours required
  • Variety of industry sector experience available
  • Pick and choose the deals you like
  • Negotiate term sheets with the strength of a group of investors
  • Get to know and work with the entrepreneur
  • Share any legal costs
  • Have fun with like minded investors
  • Potential for deal syndication with other groups

 

Angel Forum Members are

  • Active private equity investors
  • Able to contribute time, wisdom and experience to companies
  • Accredited investors
  • People who enjoy building relationships with other members

 

Angel Forum Annual Membership Comes With Benefits

  • No Forum attendance fees
  • Access to confidential angel website (for deal-flow, due diligence)
  • Discounts to educational courses and workshops
  • Automatic associate membership of NACO and ACA
  • And - importantly - the ability to network and syndicate their angel deals

 

 

JOIN THE ANGEL FORUM