AngelEquity enables registered investors to access and benefit from the expertise, connections and capital invested by angel investors into New Zealand based early-stage businesses.
1. Angels agree to terms with entrepreneurs and invest
Experienced angel investors screen, undertake due diligence, negotiate the terms of investment and valuation with the company and when happy personally invest their capital. Therefore, AngelEquity investors invest in companies at a value set by angels, rather than entrepreneurs alone.
2. AngelEquity investors invest
AngelEquity investors can see all information regarding an investment and the respective terms of the investment such as valuation. They can ask the entrepreneur questions and see previous questions and responses. Each member makes their individual decision to invest.
3. AngelEquity takes care of the legal documents
AngelEquity investors do not have to worry about any legal paperwork regarding the investment.
4. AngelEquity provides the capital to the investee company
When we have finalised all legal documentation, the transfer of funds to the company occurs. If the funding round does not complete, for any reason, funds are returned to investors without any charge.
5. Post Investment
Capital invested provides fuel and investor director(s) and Angel investors contribute skills and guidance to help a company thrive. Investors receive quarterly updates on how the company is doing.
Many companies require multiple rounds of investment so expect to have the opportunity to ‘follow on’ and invest additional capital in your companies. To spread your risk and increase your returns do as the Angels do – invest in 10+ early-stage businesses and build a portfolio.
Angels know “lemons rot faster than plums ripen”. You are likely to experience failures before successes.
Timing on returns from companies varies widely with some occurring as early as two years post investment and others taking 7 or more years.
The most common way of achieving a return is through trade sales (selling the entire business to another often much larger company) but dividends and in rare instances IPO’s (Initial Public Offering – listing on a stock exchange) can also provide returns.