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Saturday 27 May 2017

Anatomy of an Angel Investor Pitch Session Part I

Ever wanted to be a fly on the wall at a real 'Angels Den'..

If you haven't attended an Angel investment pitching session or meeting, this is how it looks.
Clue: its not like a certain famous TV programme (No one is going to be offering 40% of their business for £30k, and I've never been to a meeting with fewer than 20 angels; 20-30 is perhaps more typical, at least in London).

All angel syndicates have their own specific character; some have full time staffers, perhaps part of a larger fund or private equity structure, others linked to an (business) educational institution. Some may themselves be somewhat bootstrapped and sustained with love and sheer commitment as a second career, although increasingly there are annual fees to belong to what can be rather powerful and well-connected networks, plus a success fee for businesses sufficiently far along to pitch and attract investment money from investors.

Those cover costs, perhaps also providing legal and taxation support and training for potential and current investors, as well as curating deal flow and some early DD and information gathering of potential firms to invest in. Early stage business investing, despite the high risks, is very tax-efficient within SEIS and EIS wrappers.

Angel syndicates may also provide at least some support, pitch training and advice of a type to busy founders of early-stage business that you might associate more with accelerators or incubators, even before these syndicates have committed funds and charged their funding success fees.

The knowledge, contacts and advisory aspects of angels are sometimes under-appreciated by those not close to early-stage business or syndicates, but such help may bring some founders back to angels for repeat rounds beyond the point where you might think Series A or PE/VC rounds might seem more likely. At such times, multiple informally-connected syndicates may club together to absorb a hefty funding round, or work together with sympathetic and empathetic VC firms, family offices, Trusts or charities in suitable cases.
The quality of experience and real-life strategic and tactical advice available in some syndicates is highly attractive to founders, providing potential board members, detailed advice, seed investors at the beginning of their revenue stream, or simply contacts to find suitable recruits to fill gaps in small multi-tasking teams.

Copyright ©Mike Davis/ AskAnAngel Ltd 2017

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