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?