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Business Angel Investing Groups Growing in North America

Angel Investing Groups

 Business Angel Investing Groups

 Angel investing has long been an important source of financial support and mentoring for new and growing businesses bridging the gap between individual (friends and family) and institutional venture capital rounds of financing. Over the past several years, this sector of the private capital market has been formalizing in response to both growing demands and complexity.

 According to research conducted by Jeffrey E. Sohl at the University of New Hampshire’s Center for Venture Research, there were approximately 50 formal business angel investing groups in the United States five years ago. He now estimates that there may be as many as 170 formal and informal organizations located throughout leading technology and business regions in the US and Canada. These groups have several characteristics: loosely to well-defined legal structures; part-time or full-time management; standardized investment processes; a public face usually with a Web site and public relations activities; and, occasionally a traditionally structured venture capital/angel investing fund.

The number of organized groups has grown in response to several factors:

  •  A desire to attract better deals and generate higher returns than angels acting alone;
  •  The growth of venture capital funds and the attraction of venture investing;
  •  A widening “capital gap” between individual and institutional venture capital investors that has                                            created a need and an opportunity for pooled investments;
  •  The legal and economic complexity of these investments;
  •  A large increase in the number of self-made, high net worth individuals who want to be more involved in their alternative asset management;
  •  The volume of deal flow; and,
  •  Social camaraderie among investors.

As a result, investment screening is fairly consistent across groups. Specific organizational and legal structures, however, remain varied. Most groups developed their own organizational structures and processes independently and have recently begun to discuss and debate best practices, some of which are discussed in this paper.

For entrepreneurs and other investors, the net results of this change are mostly positive. Although the models of business angel investing groups continue to evolve, these groups are generally better financed than ad hoc groups of individual investors. These groups provide an extended network that benefits both funded companies and co-investors by providing greater due diligence, operational support and domain expertise. Business angel groups can also provide a key source of qualified deal flow for venture firms; as well as provide intermediate capital for companies with financing requirement levels between individual investors and institutional venture capital.

This paper is the product of the first summit of organized angel investing groups, an April 2002 meeting focused on the best practices of angel investing. Thirty representatives from 18 groups across North America attended the meeting at the Massachusetts Institute of Technology. The Ewing Marion Kauffman Foundation coordinated the summit, working with a committee of angel organization leaders. The summit was initiated by the leader of CommonAngels, of Boston, who noted that organized angels need and are interested in opportunities to share information in order to enhance their practices. The participating angel organizations expressed a strong interest in continued sharing of information and best practices, and will hold additional summits in the future.

What Is An Angel?

From a purely legal standpoint, an “angel investor” (or “business angel investor”) is a “high net worth individual,” usually an accredited investor (as the term is defined in Regulation D under the Securities Act of 1933 or SEC Rule 501) who invests his or her own funds in private companies, typically at the seed and early

Angel Investing Groups
Angel Investing Groups

stages. To most companies, though, angel investors are much more: they often bring expertise or affinity for that company’s product, market or management team, in addition to taking additional financial risks. Many serve as active advisors or mentors for entrepreneurs, provide additional relationships to aid the business’ growth, and supply industry and entrepreneurial experience.

Broadly, these individuals fall into four categories as defined by a study on angel investors by MIT’s Entrepreneurship Center:

  •  Guardian Angels, who bring both entrepreneurial and industry expertise. Many have been successful entrepreneurs in the same sector as the new companies they back.
  •  Entrepreneur Angels, who have experience starting companies but come from different industry sectors.
  •  Operational Angels, who bring industry experience and expertise, but generally from large, established companies, and may lack first-hand experience with the travails of a startup.
  •  Financial Angels, who typically invest purely for the financial return.

All are present within today’s angel organizations, but many Continue reading Business Angel Investing Groups Growing in North America

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Angel Investing Group Best Practices

Angel Investing

Managing Members, Guiding Presentations and Finding the Right Angel Investor Deals

Angel investing has long been an important source of financial support and mentoring for new and growing businesses, bridging a gap between individual and institutional venture capital rounds of financing or being the only source of external financing. Over the past several years, the number and types of organized business angel groups has grown, and the business models for the groups continue to evolve. These organizations are generally better financed than ad hoc groups of individual investors, but they also face their own organizational and structural challenges. This paper outlines some of the lessons shared among business angel investment groups around North America during an “Angel Organization Summit” held in October 2002.

Best practices shared by the 25 groups participating in the summit include: managing membership participation, coordinating company presentations, finding the right fit for potential investments and working with other investors, particularly venture capitalists and other angel groups.

MANAGING PARTICIPATION OF MEMBERS

Since angel groups are disaggregated organizations of individual investors, one key goal for angel group leaders – whether they are members themselves or hired managers – is to maintain appropriate levels of member involvement and application of members’ expertise. Strong member involvement ensures that the group provides more value-added contributions Continue reading Angel Investing Group Best Practices

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Being More Productive in Business

Physical energy comes from the type of food you eat, how much sleep you get and your level of physical fitness. You may not think that being healthy has much to do with your book, business or blog, but having that extra boost of energy is completely necessary at the end of a long work day. If you can’t get yourself off the couch when you get home from work, you’ll have a difficult time giving your project the attention it needs. Try the following eight tips to increase your energy and put that extra oomph toward your projects.
Sleep eight hours or more for an entire week. The most common reaction I see to the old adage that people should sleep seven to eight hours a night is laughter. Even though I could stand here and say that following the adage has helped me immensely in writing my 30 books and building my business, I know that it’s unlikely to get a long-term change out of you. Instead, I suggest you sleep eight hours or longer for an entire week. Often, that short concentrated burst of rest is enough to spring people into several Continue reading Being More Productive in Business
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How to Get Your Piece of the 700 Billion Bailout, Jobs For All

Damn the banks, damn the Wall Street traders, damn the Fed, damn them all…damn every last single voice of negativity that want us to believe that the economic good times are over. I don’t believe a single word of it. Things aren’t that bad, in fact, since I discovered this new web site called “GovernmentContractsforAll” I am convinced, more than ever, that our ship has just rolled in. Don’t believe me; check out some of these opportunities.

Printing

The US government is offering contracts to any printers or counterfeiters who feel qualified enough to reproduce $100 bills at a rate of 5 million dollars per hour. Apparently, banks in desperate need of cash will not accept money transfers from the Fed. They don’t believe the government is good for the funds. As a result of this request for cash, the US Mint will not be able to meet the increased demands for cash from the banks. In fact, demand for cash is so strong sources in the government predict that any Tom, Dick or Harry with experience working a Xerox machine have a fair to good chance of landing a contract.

Trucking

Moving around billions of cash requires some serious equipment. In a stampede, similar to the Alaskan gold rush, truckers, the country over, are applying for government contracts to haul the cash to the banks. “We haven’t seen demand Continue reading How to Get Your Piece of the 700 Billion Bailout, Jobs For All

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How To Find Out If Something Is A Scam

Is it a real deal?

I was recently made redundant and decided that between job interviews etc, I would see what money I could earn via the Internet, rather than just sleeping in or going fishing.

Well I was instantly blown away but the 40 million money making opportunities you’ll find without too much trouble via just a couple of simple google searches. And once you sign up for one newsletter or opportunity, you Continue reading How To Find Out If Something Is A Scam

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You have a Choice better than Credit Cards

Better than a Credit Card

Capital One or Chase Credit Card
Pre Paid Credit Cards

Hopefully your are not one of those credit card users who only got a credit card for the convenience of not carrying cash around. Yea its easy just charging but the are better ways for you to pay for things that charge it. Cash is really the best way to purchasing things because you get a real sense of how much money your are spending. You might not be aware of better ways to borrow money to use for your cash purchases instead of using the plastic (credit cards). This Hub was written to help you with some alternatives to credit cards. There are just too many people using credit cards instead of these alternative methods because of all the great advertising these credit card companies get done. Very few credit card users realize that there are much better ways of getting those things without getting into debt with high interest rate credit cards. In this Hub I am going to show you several ways to avoid using your credit card and avoid paying fees and interest or at least reduce to a large amount. I hope this will help you on a better path for spending your money and saving some cash as well.

I prefer Debit Cards over Credit Cards

Debt cards first started being used by most of the European countries and where rarely used elsewhere but things have changed a lot and debit cards are being used a lot more frequently. Here in the United States these cards are becoming Continue reading You have a Choice better than Credit Cards

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How to Save Money in a Recession

Save Money in a Recession

Want to Know How to Save Money?

Saving money is suddenly fashionable. After years of living beyond our means and putting it on the plastic suddenly the world is faced with economic recession saving is fashionable.

The reality for most people is quite simple: its easier to not spend money than to earn it. Not spending $20 takes a single decision, earning it may take someone on the minimum wage 2 or 3 hours.

Maybe I am lucky, my mother was always living on next to nothing, as soon as I got a job a rebelled and spent money, all that I earned in fact. That only lasted for a few years though because I never wanted to be tied to job and quickly discovered the quickest way to increase my bank balance was to not spend: so much less effort than over-time or a promotion or a second job.

So now here are some of the saving money tips which are intuitive to me but seem to be new to many people.

How to Save Money and Get Out of Debt

Saving Money on Groceries

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Mount Allison offers Conversational French courses in Moncton

Want to brush up on your linguistic skills? Mount Allison University is pleased to offer non-credit conversational French courses in Moncton starting February 12. Introductory and intermediate classes are being offered to meet a wide range of skills and interests.

Heather Patterson, Mount Allison’s director of continuous learning, says, “Whether you are just learning French or simply wish to brush up on your skills, we have courses that fit the bill as they offer not only Continue reading Mount Allison offers Conversational French courses in Moncton