Louisville Angel Investor Network
Frequently Asked Questions

WHAT IS AN ANGEL GROUP?

An Angel Group facilitates the introduction of entrepreneurs to potential investors and advisors.  Angel groups consist of individual angel investors interested in assisting and financing ventures at an early stage of development, as well as mature companies wishing to grow.

 

WHAT ARE THE BENEFITS OF MEMBERSHIP?

  • Opportunity to interact with other angel investors and to work with young / growth-oriented companies.

 

  • See more deals – the group manager maintains relationships with other angel networks near Louisville (Nashville, Owensboro/Evansville, Lexington, Cincinnati, etc.).
  • Pre-arranged meetings, for investors only – meetings are arranged as qualified deals arise. Meetings include presentations from pre-screened companies and substantial time for members’ discussion, observations and analysis.

 

  • Assistance with the due diligence process and deal closing.
  • Access to a secure “members only” section of our web site, which includes access to:
      • All presentations and other materials provided by entrepreneurs.
      • Best-practice sharing of investment tips and documents.
      • Member discussion board to confidentially discuss business plans, companies and general angel investing topics with other members.

 

  • As requested by the members, the manager may organize educational programs on term sheets, case studies, due diligence and other topics.

 

FREQUENTLY ASKED QUESTIONS:

1) What is an angel investor?
An angel investor is an individual who offers assistance to and makes direct investments of personal funds into a venture.  Because the capital is being invested at a risky time in a business venture, the angel must be capable of taking a loss of the entire investment, and, as such, most angel investors are high-net-worth individuals.  Angels are nearly always “accredited investors” as defined under the Securities Act of 1933 (see last paragraph on this document for details).

2) What is an angel group?
Angel groups consist of individual angel investors interested in assisting and financing ventures at an early stage of development, as well as mature companies wishing to grow.

3) Is membership in the group restricted?
Yes.  Only “accredited investors” are recruited for membership.

4) How do I learn more about angel investing?
The Angel Capital Association (www.angelcapitalassociation.com) offers a robust web site and seminars.

5) Must I make a minimum number (or amount) of investments each year in order to remain a member?
No.

6) Is there a minimum or maximum amount of money I may invest?
No.

7) How are investment decisions made? 
All investment decisions are yours.

8) How are presenting companies selected?
The group manager screens deals. All deals must have a sponsoring member.

9) May I invest in addition to the amount invested by the group? 
All investment decisions are yours.

10) How is due diligence conducted? 
Assistance is available by collaborating with group members. Also, the web site tracks members by their areas of expertise and the manager helps solicit assistance on due diligence. The groups can also retain the group manager to perform certain tasks or to find consultants with technical or market expertise.

11) How is the group run (administration, board, etc.)?
A group manager offers administration and the members set policy.

12) How is the group funded? 
By membership dues.

 

HOW DO I BECOME A MEMBER?

REQUIREMENTS OF MEMBERSHIP:

  • Members must be sponsored by a current member.
  • Members must agree to abide by the terms and conditions of the Membership Agreement.
  • Members must pay the annual membership fee.
    • Members must qualify as: An “accredited investor” as defined under Rule 501 of the SEC regulations, which defines an individual accredited investor as:  “Any natural person whose individual net worth or joint net worth with that person’s spouse at the time of his purchase exceeds $1,000,000”; OR “Any natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with that person’s spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year.”

     

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