Membership Overview: Making the Most of Angel Investing
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Membership Overview:Making the Most of Angel Investing
To help the Boston-area's best entrepreneurs build successful technology companies and achieve venture returns for our capital
through a professional, collaborative network.
Chris Sheehan James [email protected] (781) 274-9124 [email protected]
Benefiting from Membership
• Saving time, reducing risk through our diligence, deal terms, and investment processes
• Accessing high quality deals for venture returns
• Making your own investment decisions
• Diversifying risk through our co-investment fund
• Networking, collegiality, and fun with a peer group
• Staying current on new ideas, tech, markets
• Giving back by mentoring entrepreneurs
Annual dues are less than ½ of typical VC management fee
Chris Sheehan James [email protected] (781) 274-9124 [email protected]
Benefiting Across Investor Roles
• Attract Leading regional & national brand High volume, quality deal flow
• Assess Share ideas, diligence with industry leaders Test assumptions, elucidate risk as a team
• Assist Put best people on board & make investor plan Share workload & aggregate sufficient capital
• Have Fun Social & networking events
Chris Sheehan James [email protected] (781) 274-9124 [email protected]
Differentiating from VCs
• You pick the companies for investment
• Decisions driven by members Domain experts actively participate Vote with own wallets Actively recruit & evolve member base
• Members join boards, actively participate
We started CommonAngels in 1998 because the 'venture' had left 'venture capital' Looking back, were we ever on to something! If an early stage investment organization based on industry experience was needed then, it's needed even more today.—Rich Carpenter
Chris Sheehan James [email protected] (781) 274-9124 [email protected]
Angel Groups Growing Nationally
Member Locations
Full MemberProvisional Member
Founded 2004 by 46 groups; now 120
Chris Sheehan James [email protected] (781) 274-9124 [email protected]
Seeking to Fill Capital Gap
Stage Pre-Seed Seed/Start-Up
Funding Gap between
$500,000 and $2,000,000/$5,000,000(depending on region)
Early Later
Source Founders, Friends
and Family
Individual
Angels
Venture Funds
Investment
$25,000 to $100,000
$100,000 to $500,000
$2,000,000/$5,000,000 and up
Chris Sheehan James [email protected] (781) 274-9124 [email protected]
CommonAngels in Leadership Role
• One of oldest; founded 1998
• Largest east of California by members, deals, investments, staff, funds under management
• Co-Founding Group, Founding Chairman
• Chairman, ACEFBacked by Kauffman Foundation(Spin out of ACA focusing on research, education of groups, individual angels)
Chris Sheehan James [email protected] (781) 274-9124 [email protected]
Drawing on Unparalleled Expertise
• 68 Members: High Tech, Financial Rich expertise in > 70 specific sectors Founded >100 companies CEO of >75 >120 Sold, >45 IPOs as management
• Business, technology thought leaders Currently serve on ~100 public, private boards Have shaped the technology sector
Chris Sheehan James [email protected] (781) 274-9124 [email protected]
Areas of Expertise
Artificial intelligence Asset allocation Blade serversBiotechnology Business communications software Business performance managementBusiness intelligenceCollaboration Communications equipment Computer graphics software & hardware Consumer financial products Consumer internet applications Consumer software Data transmission Development toolsDirect marketing EDA Educational publishing & on-line learningElectronic components Embedded Systems Engineering and science market Enterprise software Financial software Health care applicationsIntellectual propertyInterface Design Internet applications Investment and Insurance Industry/Products Materials science Medical devices
Medical imaging software & hardware Medical supplies and devicesMobile devicesNanotechnologyNetworking & Network-System Management Packet switchersPayment Processing PC software applications Pharmaceuticals Portfolio Management Real time transaction systemsRetail and franchise services Retail chain store operations Retirement Planning Satellite communicationsSecuritySemiconductors Separations technology Service applicationsSoftware development tools Software usability Specialized peripheralsStorage Supply Chain Synchronization systems TelephonyTransaction systemsVOIPWater purification
Chris Sheehan James [email protected] (781) 274-9124 [email protected]
The Model: Members + Fund I + Fund II
CommonAngels Fund I, LLC
Board of Directors & Managing Director
CommonAngels, LPInvestment Committee
CommonAngels Fund II, LLCMembers
Funded Companies
CommonAngels, IncManaging Director
$10M $10M$30M
CommonAngels II, LPInvestment Committee
Fund IIFund I
1998 20052000
CommonAngels established
Chris Sheehan James [email protected] (781) 274-9124 [email protected]
Investing Conservatively
Fit: Must have expertise within CommonAngels membership
People: Passionate entrepreneur with CEO capabilities
Stage: Beta, working prototype, go-to-market
Sectors: Innovative, scalable information technology such as software, telephony, semiconductors, RFID, medical devices not requiring extensive clinical trials
Location: Boston Area
Capital: Series A financing of $500K-$5M; total capital <$20M with emphasis on capital efficiency
Chris Sheehan James [email protected] (781) 274-9124 [email protected]
Submissions(~30 PlansPer Month)
Managing Director pre-
screens emailed
submissions.
Screening TeamReview
(5 – 10 PlansPer Month)
Screening team votes on which
companies to invite to
general meeting.
General MeetingPresentations(1 – 3 PlansPer Month)
Managing Director polls members for level of investment
interest in deals, recruits diligence
team, and facilitates
selection of deal lead to begin term
sheet negotiations.
Manage Investment
Board member
represents member
interests and seeks an attractive
exit.
Deal lead closes
transaction and the sidecar
fund invests in companies that attract at least
$250K in investment
from at least 5 members.
Diligence & TermSheet Negotiations
(Coordinated byManaging Director
& Deal Lead)
Making Investments
Chris Sheehan James [email protected] (781) 274-9124 [email protected]
Example Investment: Sand Video
• Team Had Worked With one
of our Members
• Most MIT CS/EE
• Nine Founders
• Breakthrough Video
Compression Chip
• Their 3rd Company
• Identified Markets: DVD,
PVR, High Def TV
• $8MM w/Baker Capital, Navigator, Oct 2002
• Sold to Broadcom for $77.5m, April 2004
Chris Sheehan James [email protected] (781) 274-9124 [email protected]
Example Investment: Tizor
• Security Appliance
• Catches Insiders Gone Bad
• Team from Bell Labs
• Good Relationship between Founder & our Experts
• Syndicated with 2 VCs
• $3m Series A, Apr 2004
• $12M Series B, August 2005
Chris Sheehan James [email protected] (781) 274-9124 [email protected]
Expectations of Membership
• Attendance: 75% of the regular monthly meetings
(meet 3rd Tuesday of each month; location varies)
• Investment: $50K-$100K per year across 2+ deals
• Participation: One diligence team per year
• Membership dues: $3,500 per year
Chris Sheehan James [email protected] (781) 274-9124 [email protected]
Joining CommonAngels
• Sponsorship – Prospective members must be nominated for membership by an existing member.
• Meeting Attendance – Prospective members are encouraged to attend several meetings as a guest before pursuing a formal application for membership. Visits should be coordinated with the Managing Director.
• Application – Formal applications for membership should be coordinated with the Managing Director and applicants will be asked to provide a biographical summary.
• Review – At least one member of the CommonAngels board of directors meets with the applicant to discuss shared goals and interests. The board as a whole reviews and approves applications for membership.
• Formalization – New members should complete an accredited investor questionnaire and pay their annual dues.