Angel Investment Process

Deal sourcing Deal sourcing can be proactive or reactive. Most applicants come through members or through their networks. Some approach Southern Angel Investors Club directly.
Deal screening Applications are normally centralised and managed with the software package. Initial screening can be informal or formal.
Initial feedback/coaching Companies making the initial screening will be contacted and may receive some coaching regarding the expectations of investors and how to best present the company
Company presentations Selected companies may then be invited to present to the members at an event, normally held once every two months. Typically 5-6 companies present and answer members’ questions. The investors then discuss aspects of the company and potential deal in a closed session
Due diligence Due diligence is normally done on a formal basis and includes: a competitive analysis, validation of product and IP, an assessment of the company’s structure, financials and contracts, a check of compliance issues and reference checks on the team
Investment terms and negotiations If members remain interested, term sheets need to be prepared and the company valuation negotiated. The company may be asked to present to the members a final time
Post-investment support After the investment, investors often monitor, mentor and assist the companies with expertise and connections. In addition, the investors often work closely with the company to facilitate an exit at the appropriate time.
Source: OECD (2011a), summarised from ACA, EBAN and Tech Coast Angel materials