Angel Investment

There are two distinct types of Angels investors. a) Angel groups b) Individuals.

It is relatively cheap and easy to access the Angel groups such as the Founders Forum. It cost only $85 to pitch and they can raise up to $500K. Where accessing individual investors is harder and is dependent upon personal networks.

Angel Investor Contacts

AngelLoft - No cost to pitch, no raise ceiling
Blue Cove Ventures
Founders Forum
Capital Angels
Angel Institute
Australian Association of Angel Investment
Future Capital Development Fund Limited (FCDFL)

Angel Investments in Australia

Based upon a paper presented by Jordan Green
2008 National Angels Conference

Who is an Angel Investor?
An individual investing his/her own money and time directly in a growth business in Australia.

How many Angels?

Anecdotal data only

Currently:

* ~10 Angel groups – wide variety of models
* ~15 Angel networks – typically for-profit
* ~10,000 active angels

Goal for next 3-5 years

* ~100 Angel groups – diverse models
* ~20 Angel networks – diverse models
* ~100,000 active angels

How much money?

* Typical individual investment $10K-$100K
* Typical group investment $100K-$500K
* Estimated 2007 aggregate $500 million
* Estimated 2007 potential $2bn
o >75% potential investments fail to occur
* Estimated sustained annual potential $3bn+

How Angels invest

Today:

* Angels invest in what they know
* Most angels are investing individually
* Most do not use paid advisers
* Most use a trust investment vehicle
* Across all stages of unlisted life-cycle
* Typically for 3-6 years
* Typical returns of 2.5 times investment

(~25% IRR)

Tomorrow:

* Most angels invest as part of an angel group
* Angels invest in what the group knows
* Groups include mentors
* Groups use paid advisers
* Most angels use a trust investment vehicle
* Most groups use a unit trust syndication per investment
* Across all stages of unlisted life-cycle
* Typically for 3-6 years
* Typical returns > 2.5 times investment

(~25% IRR)

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