How The Angel Investment Process Works - The Band of Angels

Published: 4/9/2007 7:14:20 AM

As a member of the Band of Angels investment group in Silicon Valley, I get asked by entrepreneurs what the process is for obtaining funding.  In order to remove the mystery, here in chronological order is how it typically works:

1.  Entrepreneur emails a summary or powerpoint to the deal manager at the Band.

2.  Screening committee selects 6 or 8 companies each month to present for 15 minutes each in front of the committee.

3.  The committee votes on the top three companies who then present at the monthly Band dinner.  They get half an hour to present their company and answer any questions.

4.  If there is continued interest, there is an in-depth follow-up meeting, usually two hours long, where all the interested angels attend and dig further into the company's potential.

5.  If the group is further interested, due diligence is started along with negotiations on the term sheet.

6.  If all goes well, funding occurs within 2 to 4 weeks after negotiations are completed.

The total process, from start to finish, usually takes two to three months.  The process is one of the benefits of working with an organized angel group.  Of course, any delays in the negotiations or due diligence can extend the length of time it takes to close the transaction, though most transactions are completed in a three month time frame.

Don Jones


Don Jones
CEO, VentureDeal

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