Q. What is an angel investor?
A. Angel investors are high net worth individuals or business people who make high-risk, potentially high-yield investments in start-up companies or small businesses looking to expand their market opportunities. Angel investors typically focus on companies that have already developed a basic concept and business strategy, and are in the seed stage of investment. An emphasis is placed on business enterprises with the potential for rapid growth.
Q. How are deals selected to present to the Aggie Angel Network?
A. Applications are reviewed by a screening committee on a monthly basis. The screening committee is looking for applications from companies that represent high growth and high yield potential. A select few of the applicants are invited to present to the full Aggie Angel Network membership in person or via online presentation. All members of the Aggie Angel Network are made aware of all submitted applications, and individual members may decide to contact applicants if they are interested in learning more about the investment opportunity.
Q. What are your criteria for making an investment?
A. Aggie Angel Network members make their own investment decisions. In general, members are looking for opportunities to invest in high growth companies that have a good management team as well as a competitive advantage in the marketplace. Specifically, members will ask themselves:
- Does the company address an important problem?
- Does the company offer a good solution to the problem?
- How many people have this problem?
- Is the company’s solution better than anything offered by competitors?
- Has the company made good progress to date in identifying its risks and mitigating them?
- Does the company have a sound plan for the future?
- Does the company have a management team who can execute this plan, and who can adapt when the plan fails?
- Does the company’s plan offer a reasonable return to investors?
Q. Are there any fees to pitch the Aggie Angel Network?
A. Yes. The Aggie Angel Network is a non-profit corporation whose operations are funded by application and membership fees. All companies will be charged a $250 application fee. Companies that are spinouts of Texas A&M University and/or licensees of Texas A&M University technologies will have their $250 application fee refunded after they submit their applications. All selected companies that are invited to present to the full membership of the Aggie Angel Network at a member meeting will be charged an additional $250 presentation fee. There is a flat administration fee of $7,500 for companies that raise money from the Aggie Angel Network. The fee is completely waived if less than $100,000 is raised by the company from AAN membership. This means that for a company that applies, pitches and raises in excess of $100,000 from the Aggie Angel Network, the total of all fees paid would be $8,000. If less than $100,000 is raised from the Aggie Angel Network, the total of all fees paid would be $500.
Q. Is the Aggie Angel Network a Venture Capital fund?
A. No. The Aggie Angel Network is a group of accredited angel investors. Aggie Angel Network members make their own investment decisions and invest their own personal funds.
Q. How long is the application process?
A. From initial application submission to final negotiation of investment terms can take anywhere from one to four months. Please keep in mind that an application can be delayed or denied funding at any stage in the process.
Q. How many investments have been made so far?
A. The Aggie Angel Network has invested in 31 companies since it was formed in the Summer of 2010. The total of invested capital to date is over $9 million. The largest single deal to date was an investment of $1.5 million, and the smallest single deal to date was an investment of $5,000. The average investment is over $300,000.