Introduction to: Angel Capital Alliance

1
4th Angel Organization Summit
Washington, DC
November 5, 2003
Introduction to Angel Capital Alliance
2
Angel Capital Alliance

• The Concept
• An association for the benefit of angel
  organizations
• Comparable to the National Venture Capital
  Association
• In response to feedback from Summit attendees
• Industry is ready

3
Angel Capital Alliance

• Todays Discussion
• Introduce concept of ACA
• Explain Kauffman Foundations role and previous
  experiences
• Measure degree of interest in ACA
• Obtain feedback from prospective members
• Determine next steps

4
Angel Capital Alliance

• Kauffman Foundation has graciously offered to
  provide initial financial support
• Fabulous opportunity
• Proven track record with Kauffman Fellows
  Program, Kauffman Scholars and early
  infrastructure building support to YEO
• Allows for proper development of Alliance
  structure and goals, and initiate ACA activities

5
Angel Capital Alliance

• Charter (draft)
• Support activities for the advancement of angel
  investing and angel investment groups
• Examples of activities
• Promote the establishment of angel organizations
• Define angel investing and angel investment
  organizations
• Advancing positive knowledge of angel investing
  with entrepreneurs and equity investors

6
Angel Capital Alliance

• Charter (draft)
• Support the common interest of groups engaged in
  angel investing, including education and public
  awareness for entrepreneurs and other
  stakeholders
• Examples of activities
• Education programs (real and virtual) on working
  with angel investors
• Educate public on integral part angel investors
  and angel organizations play in economic growth
  and vitality

7
Angel Capital Alliance

• Charter (draft)
• Support research on angel investing and angel
  investors
• Example
• Define research objectives and guide structure
• Develop a methodology for creating, maintaining
  and disseminating a robust database on angel
  investments (Luis Villalobos, Chair)
• Bill Payne will address this subject

8
Angel Capital Alliance

• Charter (draft)
• Share best practices and other information with
  and among angel investment groups and angel
  investors in furtherance of angel investing
• Examples of activities
• Development of website for sharing information on
  public and members-only basis
• National and regional meetings

9
Angel Capital Alliance

• Membership
• Definition of angel investor in ACA member
  organizations
• Qualification for ACA membership
• Membership terms
• Membership process
• Membership termination

10
Angel Capital Alliance

• Membership
• Definition of angel investor in member angel
  organizations
• Individuals Accredited Investors
• Actively engaged in investment of own capital
• Investing in private companies or ventures (but
  not exclusively), typically at an early-stage of
  development

11
Angel Capital Alliance

• ACA Membership
• Groups of angel investors
• Investing predominately in private equity
• Through a member-directed investment process
• North American location
• No specific legal structure
• Examples
• Member-managed angel groups
• Angel investment funds
• Affiliation of angel investors

12
Angel Capital Alliance

• ACA Membership
• Non-qualifying entities
• Entities in which members not involved in
  investment decision process
• Individuals representing individual or entity
  investors
• Examples
• Broker/dealers
• Investment advisors and bankers
• Venture capital funds

13
Angel Capital Alliance

• Membership Terms
• Agree to intent and spirit of Charter
• Abide by bylaws and code of conduct/ethics
• Renew membership annually
• Respect mutual confidentialities
• Cooperate in mutual promotion of ACA

14
Angel Capital Alliance

• Membership Process
• Member sponsorship
• Member application
• Member termination
• Membership fee

15
Angel Capital Alliance

• Organizational Structure
• Charter and Bylaws (incorporation not necessary
  at this time)
• Board of Advisors
• Committees
• Governance
• Member
• Web site
• Education
• Public relations
• Research

16
Angel Capital Alliance

• Board of Advisors
• 11 member group representatives
• Staggered 3 year terms
• Initial board would include
• Mike Franks, Active Angels Bill Payne, Tech Coast
  Angels
• James Geshwiler, CommonAngels Susan Preston,
  Seraph Capital Forum
• Geoff Maletta, Angel Healthcare Ian Sobieski,
  Band of Angels
• John May, New Vantage Group Luis Villalobos, Tech
  Coast Angels
• Barry Moltz, Prairie Angels

17
Angel Capital Alliance

• Conclusion
• Initially sponsored by Kauffman Foundation, but
  become independent in near future
• In recognition of the essential role of angel
  investing in the capital market
• To support and benefit the angel investing
  community and, thereby, the growth of
  entrepreneurship

18
Angel Capital Alliance

• So,
• Is the angel investment industry ready?
• What are your thoughts?
• Would you join?
• How should ACA be structured?
• What is a reasonable financial contribution?