Business and Development Sector Reports

Guide For Creating Your Own Angel Investor Group

infoDev’s has released  a new guide titled “Guide for Creating Your Own Angel Investor Group” which aims to educate entrepreneurs and angels from around the globe. It offers hands-on examples, such as financial worksheets, application forms, term sheets, contracts, and checklists that may be used as templates.

The publication is a substantial update of the original Kauffman Foundation’s 2004 guidebook, which targeted a U.S. audience.

Guide For Creating Your Own Angel Investor Group

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In little more than a decade, formal angel investing organizations have shifted from being mostly a U.S. and European phenomenon to being active and visible around the world. From Colombia to Cambodia, Serbia to South Africa, angel investors build networks from scratch and put their own local spin on how these networks are founded, structured, and operated. Most impressively, these angel groups enjoy successes in very challenging environments; many do so with little or no guidance or best practices to follow. However, for every successful angel group founder there are many more potential founders looking for a place to start.

This guidebook aims to support such individuals and newly formed angel groups by presenting global best practices and tools and templates for facilitating group operations.

Launching an angel network is challenging in any environment. Doing so in a country with limited deal flow, weak institutions, and limited investor protection can seem nearly impossible. To confuse matters even more, there is no one-size-fits-all solution to set up and operate an angel organization. A diversity of models and structures has been successful worldwide. Given this context, this guidebook cannot prescribe a simple formula to set up and run your angel network. Instead, it will help you navigate the decision-making process at various stages, and give you real-world examples of how other networks have worked through difficult problems. Additionally, for those of you in countries where angel organizations do not yet exist, this guide will offer words of wisdom and encouragement from those who have blazed a trail in their own countries.

This manual is built from the Kauffman Foundation’s 2004 publication, A Guidebook to Developing the Right Angel Organization for Your Community, which was crafted for a U.S. audience. Many of the decision steps to create an angel network are the same, no matter if you are in the U.S., South East Asia, or Sub-Saharan Africa. Much of the guidance holds true in 2014 as it did in 2004. However, this international edition recognizes the additional
challenges that angels face outside the U.S., particularly in emerging economies, and teases out those problems and offers potential solutions. Also, globalization and the fast pace of technology have resulted in important new trends in angel investing since 2004. This edition will explore how the internet and networking platforms have helped international angels connect in new ways and overcome a host of obstacles. It will also touch upon topics such as crowdfunding and diaspora investing.

After you have gone through the community assessment, questions, and options outlined in this guidebook and have decided how your organization will look and operate, you may arrive at a completely new model that is not presented in this manual. What is most important is that your membership is comfortable with the result, and that the group is willing to adjust the model, goals, and orientation as it grows and gains experience. Given its broad geographic scope, this guidebook cannot provide specific guidance for every region and country. Be sure to consult your local legal experts, accountants, and other relevant actors to identify regulations that may influence your group’s structure and day-to-day operations.

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