NWA is organized as a Florida not-for-profit corporation, although the investments we organize are very much profit-oriented.
We do not have a fund per se but our membership is committed to a minimum investment once the Board of Directors makes the decision to fund a company.
We invest as a group based on a decision by the Board of Directors to fund a company. All members invest at least the minimum, per-deal amount to which they committed.
Typically, NWA members invest about $400,000 although it is possible to increase the investment size if members determine that a larger investment is warranted.
Prospective members must be nominated by a current member and approved by the Board. In addition to financial qualifications as an accredited investor, we seek individuals who have a reputations of integrity and the ability to contribute in making our investments successful. We view the funding point as the beginning of our relationship.
Yes, once you become a member, you are committing to invest in up to three (3) deals per year in the amount of not less than $10,000.00 per deal, for a total commitment of $30,000 (3 x $10,000) per year. A member may invest more than $10K per deal if desired. New members have a six month “grace period,” during which they may opt out of any capital call, while they become familiar with the group’s processes and culture. After this grace period, honoring capital calls becomes mandatory and is an understood part of “collaborative investing.” There are also opportunities to invest in follow-on rounds of portfolio companies (companies previously invested in), and such opportunities are wholly voluntary (not required as a condition of membership).
Besides being an Accredited Investor (click here for definition link to regulations), members should have diverse backgrounds like having a successful career as an entrepreneur, senior executive or professional in law, accounting, medicine, etc. Generally speaking, angel investors own financial assets between $3MM and $10MM and are comfortable allocating a percentage of their portfolio to high return/high risk investments such as early stage companies.
Further, we seek high-integrity members who are willing and able to participate in our meetings and in our process. As a member-operated organization, we need members to engage in various stages of the investment process. It is not necessary to attend every meeting although we do ask for members to contribute to our overall effort.
If you know one of our members, please contact him/her directly to ask for guidance as we are an invite-only organization. If you do not know a member, please email us here. Our process and qualifications can be found here.
We typically invest in preferred equity. Terms and Conditions are consistent with those available in the market at the time and deals are structured to anticipate future, “follow on” funding requirements.
We both co-invest alongside a lead investor and lead where we have relevant
member experience and/or strong co-investment partners.
Beyond funding, NWA members add value through hands-on company involvement. As a result, we typically invest where the company is close enough to have the access they require. We strongly prefer to invest in Florida.
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.
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.
Once we have a completed application and ancillary documents from teh entrepreneur, we follow a 9 step process abbreviated below and available in full here:
- Initial Scoring & Screening
- Live Screening Session
- Presentation to Membership
- Initial Due Diligence
- Draft Term Sheet
- Detailed Due Diligence
- Formal Vote by Investment Committee
- Monitoring & Support
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.
Can I use monthly meetings to promote my professional services to other members and prospective operators?
NWA enforces a “no pitch” rule amongst its members so you should not promote your services or company in this forum. If you would like to address our members with your product or service, please contact us and we may consider sponsorship of a meeting for consideration.
Although we do not limit ourselves to specific industries, our investment criteria lead us to segments such as software, internet, bio-tech, pharmaceuticals, medical devices, and patent-based technological innovations. In best efforts to achieve a return of ten times our initial investment (“10x”) there are only a very few investments which qualify.