Sparking the flame of Angel Investing in the Pacific Northwest
The Angel Conference program is a structured investment. It starts with a series of workshops to gather new investors and new startups. It then goes into an "American Idol" style selection phase with startup pitches, company visits, Q+A from the investors. We aim for 50+ applying companies with 30-40 investors. We try to have a balance of 50/50 between new investors and previous investors. The Investors each put up $5500 to create the fund between $150K and $200K. After the 6 finalists are selected, the investors split up into due diligence teams that explore all the aspects of the companies. At a big demo-day event, we hear pitches and then select a winner which then gets an investment from the fund.
The Angel Conference in Seattle runs twice a year. Typically with application deadlines at the end of August and February, with the final events in November and May respectively. Other communities that have Angel Conferences often run them only once a year.
An Angel Investor is someone who invests their own money into an un-registered startup. This is allowed through an SEC exemption for "Accredited Investors" in Reg D 506(b). To be Accredited, you need to have an Income of $200K or $300K with your spouse , or you need to have a networth of more than $1M (not including house).
To be a "good" Angel Investor, you need to understand about the structure of companies, how the team works, how the financials are being managed and many of the details of the business. You need to also understand how a portfolio of 20+ companies can be created that makes up for the risk associated with early companies that are just starting out.
A good place to start is to read the book by David Rose called "Angel Investing"
If you are not "Accredited" (yet), then you might look at Equity Crowdfunding as a pathway.
The Angel Conference looks for companies that are very early. However, we want them to be more than just an idea. We want to see evidence that the team can work together on a business and that the market cares about the result. This traction for the team often looks like revenue and growth in revenue.
The Angel Conference has no sector bias, so it is not just tech companies that come through. However, they need to be growth companies that have a pathway to making a significant change in valuation and a pathway to paying back the investment.
Becuase the types of companies are so very different, the terms are different as well. We are looking at early companies that have typically not taken outside investment before. If the company is solid, has good growth in revenue and has a round less than $1M, it is likely we will find a priced round. We like simple agreements like the https://www.seriesseed.com/ agreement. About half of the time, we use a simple convertable note agreement. We are not particularly fond of any of the SAFE agreements.
Yes. We want the community to understand how Angel Investing works. Both for those who are Accreditted to evaluate engaging in the asset class, and for startups that are considering taking outside money to understand how the process works. The final event is done in public.