Angel Fund Investment
According to Steven Forth of VANTEC: “I get very heavily involved in a small number of companies where I am lead investor and sit on the board. So to diversify risk and increase the number of companies in my portfolio, I augment this by also investing in an Angel fund.” Angel Fund Company
Angel Sidecar Fund Investment
Angel Sidecar Fund
Company
1.7 Level of Involvement in Company Growth and Exit The preferred level of involvement in the company varies tremendously from Angel to Angel and from deal to deal. Some Angels want to fill an operating role in the company or have weekly oversight of the company finances. Others are completely passive. Many want to sit on the board of directors or an advisory board. Yet others want no direct involvement but are available to help as needed. It is important that the expected level of involvement be clearly conveyed to the entrepreneurs early in the process. Deal Syndicati n Angel Side-Car Fund Level of Involvement Differs Among Angels For many Angels, being involved in the company growth and exit is everything: “Anyone can write a cheque. The hard part is what happens after the investment is made.” — Peter Kemball , CEO, The Kemball Group Others are more reactive: “I give the CEO my phone number and expect a call whenever help is needed. I trust my entrepreneurs to be responsible executives who know when to call me. I can’t add any value by pestering them or asking them to send me reports.” — Mike Cegelski , Angel Investor, Kouraje Management Inc. Yet others are more formal in their processes: “All of our investee companies fill out mandatory quarterly reports using our prescribed format. These formal reporting duties are included in the term sheet and shareholder agreement.” — Ross Finlay , Co-Founder & Director, First Angel Network “Good luck actually getting the reports!” — Mike Volker , Co-Founder, Vancouver Angel Technology Network A liquidity event takes place when an investor gets cash back for the cash he or she put in – often with the investee company being acquired by a larger firm or perhaps going public. In some cases, a secondary investor may buy out the earlier investors. Or the entrepreneur may pay back the investors through royalties, dividends or share buy-backs (see section 6.3). An exit event includes all forms of company exits, including not only liquidity events, but also failure, bankruptcy, or acquisition, when certain investors or creditors get zero return. VC
29 A Practical Guide to Angel Investing: How to Achieve Good Returns
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