Contents
- How is your organization structured?
- Do you have a fund?
- How do you make investments?
- How are members selected?
- What is your typical investment size?
- How are your investments structured?
- Do you lead investments?
- Do you invest outside the South Florida
area?
- What stage company do you invest in?
- What investment criteria do you use?
- What is your process for screening
potential investments?
- What follows for companies which pass
the test?
- What is your involvement once the
investment has been made?
- How can I be considered for presenting
to the New World Angels?
- What should be included in the Executive
Summary?
- How and when will I be notified?
How
is your organization structured?
NWA is organized as a Florida not-for-profit corporation,
although the investments we organize are very much profit-oriented.
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Do
you have a fund?
We do not have a fund but our membership is committed to
a minimum investment once the Board of Directors determines to fund a company.
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How
do you make investments?
We invest as a group based on a decision by the Board of Directors to fund a
company. Typically all members invest the minimum per-deal amount to which they
committed, though members may chose to invest more in specific deals.
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How
are members selected?
Prospective members must be nominated by a current member and approved by the
Board. In addition to financial qualifications as accredited investors, we seek
individuals who have reputations for integrity and the ability to contribute
to making our investments successful.
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What
is your typical investment size?
Usually, investments range from $200,000 to $600,000 although it is possible
to increase the investment size if individual members determine that a larger
investment is warranted.
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How
are your investments structured?
We typically invest in preferred stock or convertible debt. Terms are consistent
with those available in the market at the time and deals are structured to anticipate
future, “follow-on” funding requirements.
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Do
you lead investments?
Our preference is to co-invest alongside a lead investor. However, we are prepared
to lead investments, as well, particularly where we have relevant member experience
and/or strong co-investment partners.
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Do
you invest outside the South Florida area?
Our value-added comes not only in the form of funding, but also in the hands-on
involvement of selected members. Therefore, we try to be close enough to most
companies that they can have the access they require. However, we recognize
that there are many excellent companies and co-investors outside our local area,
and we are prepared to work with them, also.
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What
stage company do you invest in?
We typically invest in early-stage companies. This usually means the company
has not raised capital from an institutional investor. Furthermore, the company
is often raising money to minimize product and market development risks in advance
of raising a more significant round of venture capital. Preferably the candidate
company is already producing revenue or is forecasting revenues within two quarters.
Ideally the company should be able to provide customer references that can be
contacted by New World Angels.
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What
investment criteria do you use?
Our criteria are not cast in stone, but the likelihood of a company receiving
funding is greatly enhanced if it meets the following criteria:
1. Management. Experienced management must have a sound track record,
or the clear understanding that the founding team accepts a transitory role.
Management must demonstrate the ability to lead the organization, execute
the business plan rapidly, manage cash effectively, attract additional financial
and human capital, and adjust course when necessary. Founders of an early
stage enterprise must be willing to accept hands-on involvement and support
from the investors and the recruitment of more seasoned professional management
if and when appropriate.
2. Business Plan. The business plan must effectively address all
key aspects of the business, including management, technology, customer
acquisition, and competitive challenges. Financial forecasts must be realistic
with appropriate support for all key assumptions.
3. Compatible Co-Investors. Management, current shareholders, and
potential co-investors must have experience in businesses of this type and
stage. There must be compatibility among these parties and the shared commitment
to work together to make the company a success.
4. Compelling Product, Technology, Service or Market Position. There
must be a fundamentally exciting or disruptive technology, a unique service
or approach to an attractive market, or other distinguishing characteristics.
5. Sustainable Differentiation. There must be a credible source of
competitive advantage in the form of strong and defendable patents, proprietary
processes, first-mover position, key customers under contract, or world-class
technical talent.
6. Market Size and Growth Trajectory. The available market must be
large and/or growing rapidly, typically in excess of several hundred million
dollars or credibly expected to reach that size during the investment term.
7. Investment Structure and Terms. The investment structure and terms
must afford us sufficient protection, influence and potential upside to
justify our commitment of capital and time, and facilitate future capital-raising.
8. Exit Strategy. Management, current shareholders, and board must
have realistic valuation expectations and compatible views on potential
exit strategy.
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What
is your process for screening potential investments?
An Executive Summary can be submitted directly to a member with whom the company
has an existing relationship, or to plans@newworldangels.com.
Selected companies will be invited to present at our monthly member meetings.
Presentations last 10 minutes and are followed by an equivalent time period
of Q&A. Following this, the members vote to decide if they are willing
to proceed to the next step, which typically will involve a more intensive
follow-on meeting.
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What
follows for companies which pass the test?
If sufficient support is found within our group, we will designate a team to
negotiate terms, conduct due diligence, and manage the process through closing.
It is the due diligence team’s responsibility to make a presentation to
the Board of Directors suggesting the pricing and amount of funding to be offered,
the monetary commitment of the due diligence team, and to carry out the Board’s
decision.
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What
is your involvement once the investment has been made?
Typically at least one NWA member serves on the board of directors. A group
member may also take a more active role in working with management.
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How
can I be considered for presenting to the New World Angels?
Submit, by email, an Executive
Summary of your business plan for consideration. Please include contact information.
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What
should be included in the Executive Summary?
The executive summary must include the following:
Business Summary
Product/Service
Market Opportunity
Competitors
Management Overview
Marketing and Sales Plan
Financial Forecast
Sources and Uses of Cash
Contact Information
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How
and when will I be notified? You will be notified through
mail, phone, or email. Please allow three weeks for a response.
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mail to webmaster@newworldangels.com
with questions
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