Investment as a process

The following steps should be used as a frame to help you understand the investment process dynamics as things might change on a case-by-case basis.

CEO Angels Club is proactively sourcing a good pipeline of various deals through the local startup and founders ecosystem including:
∙ The Founders Institute graduates and network
∙ CEO CLUB network
∙ Local VC ecosystem (startups too early for them) and other accelerators (startups graduating)
∙ Startup events
∙ Startup and professional organizations
∙ All members are a great source of new and interesting deals

∙ All deals are going through Website to fill in specific application form – https://gust.com/organizations/ceo-angels-club/public_profile
∙ CEO and support staff make first screening, interviews entrepreneurs if necessary and offers it to Selection Committee (Board Members or another appointed by the Board)
∙ Selection Committee selects a few and then they are given the opportunity to complete the coaching process by CEO and make a presentation at a group meeting
∙ Coaching – CEO coaches startups to ensure that companies present the right information in an effective format
∙ Startup founders pitch in front of the members for 15 in with Q&A, followed by group discussions at group meetings
∙ All deals will be available for additional review to all members online all the time

∙ Group meetings are held 4 times per year (each Q). The CEO communicates the time and place well in advance to all members so they can plan it
∙ The meetings a private and limited only to members and the pitching startups
∙ Sometimes there could be additional educational presentations
∙ Starts with founders’ pitches and then groups discussions + networking/dinner
∙ They will normally start at 19:00 p.m. and be during a working day

∙ The group discussions are held only amongst angels; founders and guests are asked to leave.
∙ ‘GO or ‘NO_GO’ purpose of the discussion but also share additional information about market, product, founders and especially how to give the right feedback to the “NO” founders
∙ IMPORTANT – We use it as a learning experience for new members

∙ Once a startup is found promising, interested angels form a group of to further evaluate the opportunity and divide up the duties based on expertise and free-time preference
∙ The might also delegate the due diligence to be organized by the CEO (who will use external approved DD and LA experts)
∙ Investments are still being made on individual basis

∙ During the DD, interested investors will verify the statements made in the business plan, presentation, and financial projections. They will thoroughly research the team’s background and track record.
∙ CEO can lead the investment evaluation process as extra cost may apply to use a pre-selected partner (depending on the type of expertise required – e.g. cutting-edge technology expertise or just financial/feasibility audit)
∙ Members can choose to form their own DD committee and split the work amongst them selves
∙ CEO can still participate in negotiating the structure of the investment (along with the lead-investor)
∙ Voting as a group to make the investment or not is possible but individual investment decisions can apply; the important thing here is the opportunity to have equal split if we have a positive scenario – e.g. 10% equity are split evenly amongst 5 angels at the same evaluation at the same round
∙ An initial discussion of valuation and terms will happen early in Due Diligence to make sure the two parties are within working distance of each other and that Due Diligence can proceed

∙ The subset group that will participate in a given deal decides on the type of legal vehicle but normally it will be local Ltd or AD company
∙ General & Basic Term Sheet will be available to the members at no extra cost
∙ Once agreement with founders are reached and more funding is required/possible, interested angel group members might present a term sheet that defines the structure of the investment deal – including type of equity and board of director’s representation to ALL CAC members again

When all parties are satisfied with the terms and language contained in the term sheet, the deal can be executed. Closing the deal is only the beginning of the angel funding process. It is expected that investors will provide the company with access to their network of value-added contacts and offer their guidance for the growth and success of the venture.

It is up to the member to decide the level/type of next stage involvement after the investment round is closed – e.g. board seat/advisory role, etc.

∙ Nominee of subset group’s board seat
∙ Updates to the whole group with investees progress