Our angels are not required to invest. Investments should be made only after you become comfortable with the overall angel process, and you feel comfortable with a specific company.
The conventional wisdom for angel investing is that angels need to make 10 to 20 investments to achieve a positive return. Making 20 investments at $25k per investment requires $500,000. Because that investment amount is prohibitive for many, the network provides two investment options.
Option one – Traditional investment approach
In the traditional angel model, the minimal investment size is $25,000. This approach benefits companies by limiting the number of investors needed to raise a certain amount of funds.
The Southwest Angel Network’s expectation for this option has been and remains the following, “Consider making two $25,000 investments per year. Investments are an expectation and not a contractual obligation”.
Option Two – 5×10 investment approach
In this approach, investors decide to make 10 investments of $5,000 each, spread over 3 years. Note that three years consists of 12 funding cycles. Angel can opt out from investing in several funding cycles.
5×10 allows investors to build a large portfolio with a smaller financial commitment.
After a Southwest Angel Network presentation cycle, an investment opportunity will be presented to the 5×10 angels if one of our other angels has agreed to make a personal investment of $25,000 or more in the company.
In the 5×10 approach, angels are not limited to investing $5,000 and may invest a larger amount.
In practice, several investors may come together and collectively make a total investment of possibly $25,000 or more in a company.
Some companies may insist on a minimum investment of $25,000 per investee. In this case, if sufficient 5×10 investors are interested, the angel network will establish an LLC to pool the 5×10 funds and to make a single investment of $25,000 or more.
For more details see Southwest Angel Network Investing Options.
Our most effective tool for recruiting new angels is you. You have friends and associates that you would enjoy seeing at our events. Invite them to come to a dinner pitch event, and let me know so we can have a name tag ready.
And for every angel you recruit, you get a 50% discount on your future yearly membership free.
Recruit two angels per year and never pay dues again!
A directory of our Angels and Mentors is available on Microsoft OneDrive. This directory is for internal use only.
If you would like access to the OneDrive, please send an email to firstname.lastname@example.org.