Apply For Funding
The deadline for applying for our next funding cycle
is the end of the day on Friday, August 3rd.
Our network of investors looks for for-profit enterprises that can become profitable while solving significant societal challenges.
How we think about social impact.
A positive response to all three of the statements below is a good indicator that your company meets our social impact criteria.
- Your company demonstratively improves health or educational outcomes, protects the environment, facilitates financial empowerment, supports underprivileged groups, especially when benefits from any of these accrue to disadvantaged groups in our society. You can provide evidence of the impact-efficacy of your product or service, and the magnitude of your impact is significant in terms of the number of lives impacted, or the scope of environmental impact.
- If you were to explain your company’s impact to a social worker, she or he gets a big smile on their face and say “That is so cool!”
- Your company’s home page highlights your social-impact benefit or mission. If your pitch deck talks all about social impact, and your home web page does not, then we get confused.
Suggestions for a Successful Application
You might assume that social-impact investors will be satisfied with a lesser financial return than investors can earn in other angel networks. After all, supporting social-good reminds us of philanthropy. The Southwest Angel Network believes that in order to have the biggest social impact, it needs to attract the largest possible number of angels. How do we do that? By combining significant social impact and strong business results.
Here is a big hint. All of your projections (revenue, the rate of customer acceptance, cash burn and otherwise) should be based on your best understanding of the most probable outcome, i.e., your current understanding of reality. Leave inflated projections at home if you want to maintain your credibility and get funded.
In order for your company to be successful in raising funds from us, you must convince the investors of two major things:
- Your primary business mission is to address a significant societal challenge.
- Your business has a convincing path to profitability. Among the important factors leading to profitability is the fact you solve a truly significant or painful problem for customers who have a budget to pay for a solution to that problem. Your potential customers respond to your company with “we must buy your solution“. A “nice to have” response is not generally fundable. Don’t confuse paying customers with impact beneficiaries. They may be different.
Your pitch deck should closely follow the Investor Presentation Outline.
The Southwest Angel Network Impact investors strongly prefer:
- Companies with a strong management team which has significant experience in the market segment that they are attacking
- Early-stage companies that have gone to market and achieved some degree of traction or revenue. This is an important criterion since most of the other angel networks that we will work with to syndicate funding for your company will require early traction/revenue. If your company is pre-revenue, you are expected to have completed world-class market validation.
- Companies that expect to achieve significant annual revenues within the next five years.
How we Invest
Investment decisions are made by individual investors; the network does not have an investment fund.
The network runs four funding cycles per year. We don’t consider investment opportunities outside of these funding cycles.
The Southwest Angel Network is generally funding stage agnostic and has invested in the past from pre-seed through series B.
The Southwest Angel Network is open to a range of investment instrument types, including:
- Convertible debt or equity for companies that we believe will achieve a significant exit via acquisition or IPO.
- Royalty-based financing or other debt instruments for companies that we believe don’t have the potential for a significant exit.
The Southwest Angel Network embraces start-up companies with diverse management teams. At the end of 2017, fully one-half of our investments to date have been in companies led by women or by minorities.
What we don’t typically invest in
The Southwest Angel Network normally does not typically invest in:
- Class III medical device companies
- Investment funds
- Consumer packaged goods, foods or nutritional supplements
- Services-based companies, as opposed to product-based companies. Services companies face challenges in scaling significant revenue
- B2C companies serving the local market AND where many competitive alternatives are readily available to the consumers. A new fitness club or a food-delivery service might be examples.
- Venue-based businesses
- Companies whose basic mission is to solve a problem experienced by most businesses, and where the solution can incidentally also be used for social-impact purposes
- Socially-responsible companies who are not addressing a significant societal challenge as a primary company mission
- Companies whose sole social-impact is limited to sharing a portion of their profits with charities
- Companies outside of Texas (unless you have a signed term sheet from a sophisticated lead in your home region who will have a board seat)
- Companies whose business success is dependent upon an ICO (Initial Coin Offering)
Getting Help for Your Company
Mentoring: If your company is not yet ready to submit an application that meets the guidelines above, we would still like to learn about your social impact company. The Southwest Angel Network may be able to provide encouragement and mentoring that will enable your company to define a sustainable business model and get ready to apply.
Service Providers: There are a number of service providers who focus on social-impact companies, including:
- Accounting firm Atchley and Associates
- CASE Smart Impact CapitalTM based upon research at Duke University helps social-impact entrepreneurs avoid the most common pitfall in fundraising.
If you have specific services that you are looking for please contact firstname.lastname@example.org.
Accelerators: There are a number of social-impact accelerators available in Austin to help you develop your start-up.
Atchley and Associates CountUsIn Competition
Companies who awarded funding by the Southwest Angel Network are automatically entered into a competition run by the network’s sponsor, the accounting firm Atchley and Associates. Winners of the CountUsIn competition receive discounted accounting services for three years.
Funding Cycle Calendar
|Deadline for companies to apply||Friday, August 3|
|Down selection to 8 applicants based upon applications/pitch decks||Monday, August 6||Friday, August 10|
|Update of presentations using feedback from network||Monday, August 13||Friday, August 17|
|Down selection to 3 applicants via online pitches. 15 minutes to pitch and 45 minutes of discussion||Tuesday, August 21||Thursday, August 23|
|Companies update presentations & final review (via email)||Monday, August 27||Friday, August 31|
|Evening Dinner Pitch Event – 15 minutes to present and 15 minutes of Q&A||Tuesday, September 4|
To apply, download the following four files and email an application, a pitch deck, your impact commitment, and a financial summary to email@example.com. We do not accept any material containing Confidential or Proprietary legends. Please contact Bob if you have any questions. Please understand that if your company is accepted to pitch at a quarterly dinner pitch event the CEO is required to attend the meeting in person unless other arrangements are agreed to at the time that you apply.
- Application Form – Please submit in Word document or as a pdf. (We don’t have tools to open Apple or OpenOffice formats).
- Impact Commitment Form – which states your company’s commitment to measure and report on your social impact using a mutually agreeable metric.
- Recommended form of Investor Presentation – pitches that deviate widely from the recommended form typically don’t fare as well in our down-selection process. Please submit in a PowerPoint or pdf format. (We don’t have tools to open Apple or OpenOffice formats, and we do not accept pitch decks available only online, for example using tools such as SlideBean, Slide Rocket, Prezi or Sway).
- Recommended form of financial summary
Support for Funding Beyond the Southwest Angel Network
If the Southwest Angel Network leads the investment in your company, we will actively help your company syndicate the investment with other angel networks.
Crowd funding: After an investment, we will also help you consider whether crowd funding might be an appropriate source of additional funds, and will introduce you to our partner LOHAS Capital which specializes in running crowdfunding campaigns for social-impact companies. Crowdfunding campaigns should be considered if your company’s product or service would have a strong emotional appeal for a large number of consumers.
Additional funding sources for early-stage, social-impact companies include:
- Investors’ Circle, large angel network headquartered in Durham, North Carolina
- Toniic, large angel network headquartered in San Francisco
- Impact Engine, impact fund headquartered in Chicago
If your company is women-led, you should check out the following women-led funding sources:
- Golden Seeds, a national organization
- Pipeline Angels , a national organization
- Portfolia – Next Wave Venture, a national organization
- XFactor Ventures in Boston
- X Squared Angels in Columbus, OH
- Next Act Fund in Pittsburg
- Jump Fund in the Southeast US
- Sofia Fund in Minneapolis-St. Paul
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