Angel Capital Alliance

4th Angel Organization Summit Washington, DC November 5, 2003 Introduction to: Angel Capital Alliance Angel Capital Alliance • The Concept: An association for the benefit of angel organizations Comparable to the National Venture Capital Association In response to feedback from Summit attendees “Industry” is ready Angel Capital Alliance • Today’s Discussion: Introduce concept of ACA Explain Kauffman Foundation’s role and previous experiences Measure degree of interest in ACA Obtain feedback from prospective members Determine next steps Angel Capital Alliance • Kauffman Foundation has graciously offered to provide initial financial support Fabulous opportunity Proven track record with Kauffman Fellows Program, Kauffman Scholars and early infrastructure building support to YEO Allows for proper development of Alliance structure and goals, and initiate ACA activities Angel Capital Alliance • Charter (draft): Support activities for the advancement of angel investing and angel investment groups  Examples of activities: – Promote the establishment of angel organizations – Define angel investing and angel investment organizations – Advancing positive knowledge of angel investing with entrepreneurs and equity investors Angel Capital Alliance • Charter (draft): Support the common interest of groups engaged in angel investing, including education and public awareness for entrepreneurs and other stakeholders  Examples of activities: – Education programs (real and virtual) on working with angel investors – Educate public on integral part angel investors and angel organizations play in economic growth and vitality Angel Capital Alliance • Charter (draft): Support research on angel investing and angel investors Example:  Define research objectives and guide structure  Develop a methodology for creating, maintaining and disseminating a robust database on angel investments (Luis Villalobos, Chair)  Bill Payne will address this subject Angel Capital Alliance • Charter (draft): Share best practices and other information with and among angel investment groups and angel investors in furtherance of angel investing  Examples of activities: – Development of website for sharing information on public and “members-only” basis – National and regional meetings Angel Capital Alliance • Membership: Definition of angel investor in ACA member organizations Qualification for ACA membership Membership terms Membership process Membership termination Angel Capital Alliance • Membership: Definition of angel investor in member angel organizations:  Individuals – “Accredited Investors”  Actively engaged in investment of own capital  Investing in private companies or ventures (but not exclusively), typically at an early-stage of development Angel Capital Alliance • ACA Membership: Groups of angel investors Investing predominately in private equity Through a member-directed investment process North American location No specific legal structure  Examples: – Member-managed angel groups – Angel investment funds – Affiliation of angel investors Angel Capital Alliance • ACA Membership: Non-qualifying entities:  Entities in which members not involved in investment decision process  Individuals representing individual or entity investors – Examples: o Broker/dealers o Investment advisors and bankers o Venture capital funds Angel Capital Alliance • Membership Terms: Agree to intent and spirit of Charter Abide by bylaws and code of conduct/ethics Renew membership annually Respect mutual confidentialities Cooperate in mutual promotion of ACA Angel Capital Alliance • Membership Process: Member sponsorship Member application Member termination Membership fee Angel Capital Alliance • Organizational Structure: Charter and Bylaws (incorporation not necessary at this time) Board of Advisors Committees:       Governance Member Web site Education Public relations Research Angel Capital Alliance • Board of Advisors: 11 member group representatives Staggered 3 year terms Initial board would include: Mike Franks, Active Angels James Geshwiler, CommonAngels Geoff Maletta, Angel Healthcare John May, New Vantage Group Barry Moltz, Prairie Angels Bill Payne, Tech Coast Angels Susan Preston, Seraph Capital Forum Ian Sobieski, Band of Angels Luis Villalobos, Tech Coast Angels Angel Capital Alliance • Conclusion: Initially sponsored by Kauffman Foundation, but become independent in near future In recognition of the essential role of angel investing in the capital market To support and benefit the angel investing community and, thereby, the growth of entrepreneurship Angel Capital Alliance • So, Is the angel investment “industry” ready? What are your thoughts? Would you join? How should ACA be structured? What is a reasonable financial contribution?