Aaron Everhart - Hatch! Ventures
Angela Lee - 37 Angels
Murali Prasad - Sizzle Science
The economics of your angel network have to make sense - you’ll have to charge some fees for legal, administrative, vetting deals, and the fees should encompass the cost of running the network.
Financial returns are integral to the success of a network. It can take 5-7 years for any returns to be realized for the network.
Calculating the internal rate of return (IRR) and the percentage of startups you’ve funded that have raised follow-on rounds can be indicative of future returns.
When launching an Angel Network, start with a thesis and then broaden out afterwards. Choose a thesis in which angels in your network have experience so they can provide deal flow, help in diligence, and can provide value and support to the startup after investment.
Investors should look for 4 P’s when evaluating a startup:
- People - complimentary, industry experience, and coachable, and driven.
- Problem - big market, attractive competitive landscape
- Progress - repeatable progress, is the customer acquisition process
- Price - valuation
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