THE FASTEST GROWING INVESTMENT ASSET CLASS!
CitySide has established AngelsU™ in order to educate and inform accredited investors and professionals that are interested in becoming angel investors on the fundamentals of early-stage investing. With over 20 years of early-stage investment experience, we will share the industry benchmarks and best practices of successful angel investors from around the world.
Early-Stage investing is more than just a “Gut” feeling. There is a proven practice and discipline to build a high performance portfolio. We will touch on the DO and DON’T of angel investing as well as the different track each investor should choose based on their interest and risk profile.
WHO IS IT FOR?
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ACTIVE INVESTORS
Active Angel Investors who are looking for a deeper level of knowledge and to be connected to a community of other active investors, ”crowd wisdom” in order to learn, grow.
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FAMILY OFFICES
They are looking for a new asset class in order to diversify their exposure into early-stage investing and expand their family portfolio to ensure their wealth preservation and growth.
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NEW INVESTORS
High-Net worth individuals that are looking to start their journey in early-stage investment and build a high performing portfolio. Understanding the fundamentals of Angel investing.
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SMALL CAP LP’S
Limited Partnerships that are looking to explore the high returns of early-stage investing and diversify their portfolio to ensure the acceleration of their wealth building.
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“In times of change, learners inherit the earth, while the learned find themselves beautifully equipped to deal with a world that no longer exists.”
―
THE ANGEL INVESTORS FUNDAMENTALS!
No. [01] - Defining an Investor DNA (Distinct, Narrative, Attribute)
First step is to define your DNA as an investor, are you an active investor, semi active or passive? It is critical from an investor to know how you would like to play the game. Building your investors “Brand” is essential to attract the kind of deals that will fit your profile.
- Understand your investor personality
- How to match my Investor DNA to my investments?
- Define my Goals & Investment Objectives
- Creating my investment portfolio strategy
- Mapping my execution strategy
No.[02] - Creating an Investor Risk - Profile
Each investor has a unique risk tolerance based on their financial ability and capability. It is highly important to build your risk profile in a way that will fit your current and future financial needs and goals. It is one of the most important fundamentals in early-stage investing.
- Understand my Risk Tolerance
- Developing my investment horizon
- Capital allocation to high risk investments
- Understanding my Tax Profile
- Establish my Risk Management Model
No. [03] - Defining your Operating Mode
Explore and understand all of your options, do you want to invest as an independent, join a group or a syndication or invest in a fund. It is a challenging undertaking, you need to know your strengths and weaknesses and choose appropriately
- Define your Involvement – Active, Semi Active or Passive
- Chose my Platform – Independent – Group or Fund or both
- Chose a legal structure
- Creating your personal investor “Playbook”
- Create your investment guideline
No. [04] - Building a Deal Flow
Understand how to build your deal flow such that it will be in high quality deals. An experienced investor goes through 300 deals to select 1. To build a portfolio with significant returns, you will need to invest in 24-30 companies over time to create a high probability of multiple returns. Do you do this by yourself or in a group or participate in a fund?
- Understanding the deal flow dynamics
- Choose the right deal flow channels
- Working your deals flow discipline
- Screening, vetting and selecting your deals
- Establishing your deals selection process
No. [05] - Early-Stage Due Diligence
Startup companies do not have much history or track records and many of them are pre-revenue. You will need to understand what is being evaluated and what factors are in your decision process. In some ways it is more of an Art than a Science.
- The Driver, The Car and The Race dynamics
- Understanding the Drive Dicademy
- What is an effective early-stage Due Diligence
- Controlling your due diligence cost
- Create a due diligence summary report
No. [10] - Designing an Exit Strategy
Knowing when to exit and when to go all in is paramount to successfully manage your own financial expectations and ensure you are working within your own defined risk profile. How to create your benchmark for exit to avoid temptations and blind spots along the way.
- What is an exit Strategy?
- Building an exit triggers and indicators
- Building and planning for an exit
- Timing & execution
- Completions and clean ups.
No. [09] - Managing an Active Portfolio
Startup founders are a moving target and some chaotic times and not necessarily great communicators. Establishing communication expectations are key to effective portfolio management to avoid surprises and unknowns.
- Creating Key Performance Indicators KPIs
- Creating your Portfolio Dashboard
- Creating a Reporting & Updates mechanism
- Keeping current and accurate read on performance
- Establish Crisis Management process
No. [08] - Governance & Involvement
Startups need love and care like a child. You will need to understand what your level of governance and involvement should be to make sure the expectations are very clear. What to include in the deal terms sheet and how to protect your interest for the log run.
- Understanding investment governance
- Understand the Involvement paradox – how much is too much?
- The Founders and the Coconut Factory dynamic
- Managing Condition of Satisfaction
- Understand your role & responsibilities as an investor
No. [07] - The Deal Closing Process
Understanding the basic transaction one-on-one. Know the legal documents stack required and the basic tax implication is each type of deal structure is paramount in order to avoid unnecessary time robbers, advising and legal fees, that can be expensive at times.
- Understand the closing documents
- Term Sheet
- Subscription Agreements
- Convertible Notes
- SAFE
- Venture Debt
- Operating Agreement
- Rights & Warrants
- Read twice sign once approach
- The guidelines of using your legal resources
- Documentations & Records Keeping
- “The Kitchen Sink”
No. [06] - Fundamentals of a Deal Structure
Each deal is different , some with convertible notes, SAFE, priced (equity) rounds or venture debt. Knowing how to choose the right structure for each deal requires deep understanding in a startup business dynamics and the impact of future rounds of funding on your investment.
- Understanding the differences – the pros & cons of:
- Equity (Priced) Round
- Convertible Notes
- SAFE
- Venture Debt
- Understanding the Term Sheet dynamics
- The importance of investors rights and warrants
- Negotiating the terms that right for you
- Choose the right structure to the right deal
- Understand the difference between Common and Preferred shares
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