Angel Investors in Australia and the US

In his article – ‘The Top 10 Angel Investor Groups' Jason Fell looks at the largest groups that fund startups, ranked by number of investors.

In the United States, the Angel Capital Association is the "trade association" of investment groups.  Angel investing in Australia are represented through the Australasian Angel Investors Association.

It is useful as an Australian startup, to assess if there is value in establishing early, a US presence for your company and attracting Angel support there. Some Angel groups syndicate support across 2 or 3 groups, capitalizing on the other group's research and due diligence processes.  Jason Fell lists the following groups as the largest in the US to support startups:

Ohio TechAngel Funds, Columbus, Ohio
Number of angels: 282
Who it helps: Supports early-stage Ohio-based information technology, advanced materials, and medical technology companies.

Tech Coast Angels, Los Angeles
Number of angels: 263
Who it helps: Provides connections, knowledge, mentoring and operational assistance to early-stage entrepreneurs in the tech, biotech, consumer products, Internet, information technology, life sciences, media, software and environmental markets.

Investors' Circle, San Francisco
Number of angels: 225
Who it helps: Uses private capital to promote businesses that address social and environmental issues. The group has invested almost $150 million in 225 companies, it says.

Golden Seeds LLC, New York City
Number of angels: 190
Who it helps: Members invest directly, or through a managed fund, in companies that are founded by or led by women. Sectors include consumer products, technology, software and life sciences.

North Coast Angel Fund, Cleveland, Ohio
Number of angels: 180
Who it helps: Invests in Ohio-based technology startups.

Band of Angels, Menlo Park, Calif.
Number of angels: 136
Who it helps: Group of former and current high-tech executives that has invested almost $200 million in early-stage technology companies.

Hyde Park Angel Network, Chicago
Number of angels: 133
Who it helps: Members invest in seed and early stage businesses, primarily located in the Midwest. Industries include: information technology, business services, industrial technology, financial services, consumer or industrial products and healthcare services.

Alliance of Angels, Seattle
Number of angels: 100
Who it helps: Early-stage investors in startups based in the Northwest region of the country.

Pasadena Angels, Altadena, Calif.
Number of angels: 100
Who it helps: Provides up to $750,000 in early-stage and seed financing to startups in southern California.

New York Angels Inc, New York City
Number of angels: 99
Who it helps: Made up of entrepreneurs, CEOs, venture capitalists and other business leaders, the group invests between $250,000 and $750,000 in early-stage technology companies generally located in the Northeast.

About the Author

Kate Ingham is a partner at Alchemy Equities, a boutique corporate advisory firm that specializes in private equity capital raising for growth companies in Australia. For more information on venture capital australia please visit: http://alchemyequities.com.au/

The Power of Social Proof When Capital Raising

If you are considering capital raising for your business, one of the keys to a successful equity capital raising is "social proof".  Here Paul Niederer, Managing Director of the Australian Small Scale Offerings Board (ASSOB) talks about social proof and ASSOB.

"The evolution of an ASSOB equity capital raising is highly dependant upon "social proof".  Social proof is proof that other investors have become "followers" of the entrepreneur and are supporting them in their endeavour. This proof is shown on the ASSOB Capital Raising Platform as "red squares".  If an investor is seeking to invest in a company currently raising capital one of the best indicators of progress is capital raised to date," says Paul.

When you consider investors, it serves a company to build a list of first "followers" of the company.  These are often people who have observed the team over their professional lives, distributors or suppliers of the company – who want to "buy in".  Or it may be networks of the team.

If first investors are not found from the networks that can effectively endorse the business, it is in Paul Niederer's words "not fair to expect people totally unfamiliar with the business to invest private equity capital. For this reason ASSOB seldom allows a company that has not secured investment from networks of the business to open live on the ASSOB Equity Capital Raising Platform. If this is the case the company needs to go back to the drawing board and evaluate why their offering is not attractive and what needs to be done to attempt to get the offer on a course where it is attractive to friends, followers and fans of the business. ASSOB & Alchemy can facilitate a three hour "Discovery Meeting" to assist in achieving this".  

As one of the lead sponsoring members of ASSOB, Alchemy manages the offer through a VIP process to the networks of the company.  We structure the offer into 2 or 3 rounds with escalating prices and work the first round tightly with the founding team.   We then open the offer up to a broader network through a well structured and proven campaign methodology.

Other features that make the marketing of a capital raising offer effective include:
- The ability to create impending events such as a listing date,
- Ability to offer a discount to networks of the issuers prior to a listing,
- prospectus-quality offer documents,
- validation achieved by having an external sponsor (corporate advisor) that is approachable & responsive to investors,
- social proof and transparency provided by the ASSOB listing of the offer,
- collaterals including a company video on the issuer page and regular communication with current and potential investors
- Our communications cover the 18,000 subscribers on the ASSOB platform receiving monthly issuer updates and over 1000 on the Alchemy investor list, including a further 4000 via our database. 

One of our favourite exemples to demonstrate the power of social proof and the way to create momentum, is reflected in the video on YouTube – Leadership Lessons From the Dancing Guy. Enjoy!

About the Author

Kate Ingham is a Partner with Alchemy Equities, a corporate advisory firm which specializes in equity capital raising for high growth businesses. For more information on private equity capital please visit: http://alchemyequities.com.au/