cretin's Profile
Train
15
points

Questions
3

Answers
4

  • Train Asked on September 7, 2015 in Angel Groups.

    Angel investment offers one component of a healthy startup ecosystem. There are two key elements to that benefit. First, Angel investment helps to develop a culture of risk taking. Those who have been successful angel investors, might be more inclined to participate in other aspects of the startup ecosystem and fund more local startups.  In some cases, angel investors have launched their own startup businesses and have some good experiences to share.  More simply, a successful angel investor might be more inclined to offer additional mentorship to entrepreneurs or participate in other aspects of entrepreneurial service provision, such as ‘pitch’ competitions to help entrepreneurs practice their pitches.

    Second, Angel investment provides a rigorous due diligence process. This process helps the startup improve their business model and readies the startup to expand their business into regional, national, and international markets. A rigorous due diligence process also helps to lower the risk for angel investors so that potentially more funding can be available from the angel community in the future.

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  • Train Asked on September 7, 2015 in Angel Groups.

    Having an experienced angel act as an advocate or mentor through the investment process is not all that common.  There is a lot of value to working with an angel that knows all aspects of the investment process really well.  Normally an entrepreneur applying for funding goes through a multi-step process that includes building a pitch deck, going through pre-screening, screening, and then a full investor meeting – pitching their company or idea each time.  If the Angel group has strong interest, then the entrepreneur needs to work with the Angel group on a term sheet and the due diligence process.  An Angel mentor who knows each step of the process well can help entrepreneurs have a much better chance of getting funded because Angels are looking for different things in each step of the process.

    If you plan on seeking Angel investment, it is important to reach out to an Angel that knows the process well for guidance and mentorship and to be an advocate for you within their group.

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  • Train Asked on September 7, 2015 in Angel Groups.

    Investment over the lifetime of a successful startup usually comes from many places. These might include Seed Funds, awards from competitions, or multiple angel investor groups. For example, a collaboration between Angel investors can speed up the investment process because the entrepreneur can make the same pitch to several groups in a short timeframe.  In addition, different Angel groups might have a four or five page due diligence checklist, but instead of each group doing their own due diligence, the work can be split up into logical groupings so that each investor group completes a separate portion of the due diligence to build a shared due diligence report.

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  • Train Asked on September 7, 2015 in Angel Groups.

    For the entrepreneur there can be more investment funding put together. A network of angels investing together, can tap into more collective funds, as a group. Also, it helps provide entrepreneurs with additional mentorship and cheerleaders. One of the most important elements of obtaining Angel funding is to build relationships with mentors within the Angel group.  Angels are typically high net worth individuals that are successful entrepreneurs or business leaders, so they are a great resource to tap into.  Angel collaboration also can provide extra legitimacy for the startup when that company seeks follow on funding.

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