“Building An Alumni Angel Group”, addresses everything from best practices in leveraging university ecosystems to deal structuring. This 60-minute panel session features 4 leaders of top university angel groups: Harvard Business School Alumni Angels, Princeton Alumni Angels, IU Angel Network, and Baylor Angel Network. The panel is moderated by Assure CEO Jeremy Neilson. Watch the video of this panel below:
This opportunity to learn from and connect with leaders in the alumni angel space included a Q&A with our panelists where the following questions were answered:
Gust and Proseeder are Angel group software programs to assist with the sharing of deal flow and due diligence. Other options are the traditional options of email and Google spreadsheets. When it comes to platforms for SPVs and Syndicates, most use Glassboard (Assure’s technology platform).
IU and Baylor both charge $1500 per year. Some groups charge more and some groups don’t charge any membership fees. The purpose of fees is to increase group engagement and participation more than revenue.
Every angel group has its own personality, structure and process but the key to a strong and successful group is either full-time team members like IU and Baylor or dedicated volunteers like with Princeton and Harvard. The group size and volume of deals will oftentimes dictate the size of the teams but one highly dedicated individual can build a very successful angel group.
Panelists and Alumni Groups on Linkedin:
Angel Capital Association (ACA): https://www.angelcapitalassociation.org/
Assure: Assure SPVs
It is recommended that only accredited investors be allowed to invest in private assets like startups. If an angel group encourages its members to invest directly into the startup, the startup will likely reject any investor that is not an accredited investor. Non-accredited investors have what Assure’s CEO calls “super rights” and if the company wants to raise additional funds in the future from institutional investors then these non-accredited investors will be forced off the cap table. If an angel group uses SPV’s, the non-accredited issues still exist and groups like Assure will not allow the non-accredited investors to participate because of their “super rights” granted to them by the SEC and other regulatory agencies.
There are two types of fund raises that are available to angel groups - 506(b) raise and a 506(c) raise. If an angel group selects a 506(b) raise then each investor “self accreditation” by checking a box and signing a document. The angel group, unless it knows otherwise, can rely on the investor’s statement that they are accredited. If the angel group selects a 506(c) raise then each investor must be verified, through a verification process, that they are accredited. Assure provides this verification service for its clients and it requires the sharing of documentation for review. Most investors do not like to share their personal information and would prefer self accreditation.
Most groups have their own process and pitch days but some supplement their own deal flow with other groups. Usually, an angel group receives more deal flow than they have time to evaluate and present to their members.
If the proposed changes to the definition of “accreditation” are finalized then this would open up a larger number of alumni that could participate in the group investments. Everyone that managing angel groups or other syndications are eagerly awaiting for the final word on these changes.
A discussion on everything from best practices in leveraging university ecosystems to deal structuring.