1.5 Co-Investing With Other Angels and Angel Groups There can be a lot of work in Angel investing. It would be virtually impossible to meet personally with 200 companies, complete due diligence on 30, paper 20 deals, and then sit on 20 boards of directors. Unless this is their full-time investment management organization with staff, most Angels specialize in chosen aspects of the process where they can really add value and develop expertise. And unless you are a Lone Wolf doing everything yourself, you will be sharing the workload with other Angels or Angel group managers. To fit into this ecosystem, take some time to do an honest assessment of your interests, strengths and weaknesses. How active or passive do you want to be, and which aspects of Angel investing do you want to focus on? Are you really good at assessing the character, integrity and trustworthiness of other people? Or are you better at detail-oriented analysis of the pro forma financial projections? Do you want to play a lead role in the due diligence process and negotiate the deal? Do you want to sit on the board of directors or advisory board of the investee company? Working as part of a consortium of Angels is a great way to learn, share what you know, mitigate risk, and really get to know and develop a trusting relationship with your co-investors. Many Angels tend to find several people that they like to do deals with, and this is part of the joy and excitement of Angel investing. “I’m very pro co-investing. People with different ideas and knowledge prevent you from falling in love with a company. I particularly like to co-invest with an expert who can run the numbers – I’m not a finance guy. I like to focus on the entrepreneur. The people are really the key factor because the company will need to pivot. I rarely invest alone unless I’m doing it due to a personal connection. In those cases, it’s really love money, and I’m investing in a friends-and-family round.” (Mike Cegelski) If you choose to join one of the numerous Angel groups across Canada (see the member directory at www.nacocanada.com for a list of Angel groups in Canada), you can benefit from many aspects of membership: • Access to a regular deal flow of investment opportunities • Pre-screened investment opportunities can save time • Opportunities are presented in a consistent format • Investment presentations by entrepreneurs are regularly scheduled • Opportunities to network, co-invest, and make new friends with other Angels • Share the workload of due diligence and deal negotiations • Educational opportunities • Access to an array of experienced consultants and advisors
How to Achieve Good Returns
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