Apply For Funding
The deadline for applying for our next funding cycle
is the end of the day on Friday, July 28th.
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 improves health or educational outcomes, protects the environment, facilitates financial empowerment, or supports social causes directly, especially when benefits accrue to disadvantaged groups in our society.
- 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 lessor 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, rate of customer acceptance, cash burn and otherwise) should be based upon 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 a important criteria 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 normally don’t consider companies outside of these 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.
What we don’t typically invest in
The Southwest Angel Network normally does not typically invest in:
- Medical device companies
- Investment funds
- 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 with the 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 or B Corp 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 investor in your home region who will have a board seat)
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 Austin-based service providers who focus on social-impact companies, including the accounting firm Atchley. 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
|Third Quarter 2017 Schedule||Begin||End|
|Deadline for companies to apply||Friday, July 28|
|Down selection, to 8 applicants||Monday, July 31||Thursday, August 3|
|Update of presentations using feedback from network||Friday, August 4||Wednesday, August 14|
|Webex dry-run pitches: Down selection to 3. 15 minutes to pitch and 45 minutes of discussion||Thursday, August 15||Tuesday, August 18|
|Company updates presentation & has final review with network||Wednesday, August 18||Monday, August 20|
|Evening Dinner Pitch Event – 15 minutes to present and 15 minutes of Q&A||Tuesday, August 22|
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.
To apply, down load the following three files and email an application, a pitch deck and a financial summary to email@example.com. Please contact Bob if you have any questions :
- Southwest Angel Network Company Application
- Recommended form of Investor Presentation – pitches that deviate widely from the recommended form typically don’t fare as well in our down-selection process
- 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.
After an investment, we will also help you consider whether crowdfunding 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:
- Enable Impact, nation-wide crowdfunding from accredited investors
- 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 angel networks:
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