What are angel groups?
Individual angels are joining together with other angels to evaluate and invest in entrepreneurial ventures. The angels can pool their capital to make larger investments. ACA has more than 400 angel groups in its database and many more across the globe. Angel organizations come in many forms, but all have certain characteristics:
- They meet regularly to review business proposals
- Selected entrepreneurs make presentations to the membership of the group
- Member angels decide whether to invest in the presenting business
- Angels work together to conduct due diligence to validate the plans, statements and history of the entrepreneurial team
Other points of interest and important statistics about angel groups are:
- The size of angel group investments in entrepreneurial firms varies widely. The average ACA member angel group had 42 member angels and invested a total of $2.42 million in 9.8 deals per year in 2015.
- Between 10,000 and 15,000 angels are believed to belong to angel groups in the U.S.
- Many angel groups co-invest with other angel groups, individual angels and early-stage venture capitalists to make investments of $500,000 to $2 million per round.
- Groups invest in innovative firms in a range of industries. The most common areas are software, medical devices, telecommunications, and manufacturing.
- While some groups focus on a specific industry area, the majority are open to a variety of areas and select those markets with which some of their members have expertise. [Source]
Want to learn more?
- Blog Post: What Do Investors Talk About When You Leave the Room?
- Article: 7 Ways for Entrepreneurs to Find Investors and Raise Millions
- Other Websites to Reference:
Angel Groups, Directories and Resources
Serious potential investors will launch a formal due-diligence investigation. Often, at this stage the investor will conduct a formal review of the business assumptions that are critical to determining the commercial value and potential of the innovation. If the partner is satisfied with its due diligence effort, the two parties will enter into a negotiation of investment terms, which will be detailed in a term sheet.