C HAPTER 8: B UILDING A N A NGEL G ROUP
Following that first dinner, 12 investors, with the support of KEDCO, formed an ad hoc group and began meeting monthly as the Kingston Angel Network. They were motivated as much by the need to assist the economic development of the community as by the goal of achieving superior financial returns. The group quickly ruled out pooled investments, as no one wanted to be responsible for investing someone else’s money. Instead, the group decided to cooperate on uncovering deal flow and evaluating opportunities, and then to invest as individuals where appropriate. Finding and evaluating deals KEDCO provides the public interface for the angel group through its Web site and offices. Entrepreneurs fill in a one-page summary, which can be downloaded from the KEDCO Web site, for screening and coaching by KEDCO staff. This also provides a coarse filter to ensure that proposals sent to the angel group meet its basic requirements. Following this initial screen, applications are passed onto the members of the network. If a member expresses interest in the proposal, the entrepreneur will be scheduled to present at an upcoming meeting. If not, the proposal will receive one final review at the next monthly meeting. Presenters are typically allotted 20 minutes, with an additional 20 minutes for questions. Investors interested in pursuing the opportunity create an ad hoc committee to pursue due diligence and negotiations. If there is no interest in the proposal, the entrepreneur is given feedback on the reasons, and if possible, the names of contacts who may be able to help. In its first year, the Kingston Angel Network considered 24 proposals and closed one deal. At 4 per cent on this albeit small sample set, the close rate is close to the range of one to three per cent typically found in angel investing. While membership of the group has fluctuated, there remain 12 members, including six who are active on a regular basis. Four of these individuals participated Investments don’t necessary have to be made at early stages or in any particular industry. Any proposal that represents a sound business opportunity, while fulfilling community objectives, is looked at seriously. VANCOUVER ANGEL NETWORK The Vancouver Angel Network was created by a small group of like-minded investors in 1999. The group began as a casual meeting of approximately 20 people. These were individuals who had been successful in running their own businesses and who were looking to be active participants in the businesses they invested in. From these informal meetings a more formal structure evolved. Today, there are over 200 members, with 40 or 50 attending the network’s monthly breakfast meetings. The philosophy of the group is simple. People are there to make evaluations of serious proposals brought forth by the local business community. The group meetings also provide the investors with the opportunity to get to know each other and trade stories and experiences about what they are currently working on. in the lone deal to be closed. Investment Strategy
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