Membership Overview: Making the Most of Angel Investing

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Membership OverviewMaking the Most of Angel
Investing
To help the Boston-area's best entrepreneurs
build successful technology companies and achieve
venture returns for our capital through a
professional, collaborative network.
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Benefiting from Membership

• Saving time, reducing risk through our diligence,
  deal terms, and investment processes
• Accessing high quality deals for venture returns
• Making your own investment decisions
• Diversifying risk through our co-investment fund
• Networking, collegiality, and fun with a peer
  group
• Staying current on new ideas, tech, markets
• Giving back by mentoring entrepreneurs
• Annual dues are less than ½ of typical VC
  management fee

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Benefiting Across Investor Roles

• Attract
• Leading regional national brand
• High volume, quality deal flow
• Assess
• Share ideas, diligence with industry leaders
• Test assumptions, elucidate risk as a team
• Assist
• Put best people on board make investor plan
• Share workload aggregate sufficient capital
• Have Fun
• Social networking events

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Differentiating from VCs

• You pick the companies for investment
• Decisions driven by members
• Domain experts actively participate
• Vote with own wallets
• Actively recruit evolve member base
• Members join boards, actively participate

We started CommonAngels in 1998 because the
'venture' had left 'venture capital' Looking
back, were we ever on to something! If an early
stage investment organization based on industry
experience was needed then, it's needed even more
today.Rich Carpenter
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Angel Groups Growing Nationally
Founded 2004 by 46 groups now 120
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Seeking to Fill Capital Gap
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CommonAngels in Leadership Role

• One of oldest founded 1998
• Largest east of California by members, deals,
  investments, staff, funds under management
• Co-Founding Group, Founding Chairman
• Chairman, ACEFBacked by Kauffman
  Foundation(Spin out of ACA focusing on research,
  education of groups, individual angels)

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Drawing on Unparalleled Expertise

• 68 Members High Tech, Financial
• Rich expertise in gt 70 specific sectors
• Founded gt100 companies
• CEO of gt75 
• gt120 Sold, gt45 IPOs as management
• Business, technology thought leaders
• Currently serve on 100 public, private boards
• Have shaped the technology sector

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Areas of Expertise

• Artificial intelligence
• Asset allocation
• Blade servers
• Biotechnology
• Business communications software
• Business performance management
• Business intelligence
• Collaboration
• Communications equipment
• Computer graphics software hardware
• Consumer financial products
• Consumer internet applications
• Consumer software
• Data transmission
• Development tools
• Direct marketing
• EDA
• Educational publishing on-line learning
• Electronic components

• Medical imaging software hardware
• Medical supplies and devices
• Mobile devices
• Nanotechnology
• Networking Network-System Management
• Packet switchers
• Payment Processing
• PC software applications
• Pharmaceuticals
• Portfolio Management
• Real time transaction systems
• Retail and franchise services
• Retail chain store operations
• Retirement Planning
• Satellite communications
• Security
• Semiconductors
• Separations technology
• Service applications

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The Model Members Fund I Fund II
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Investing Conservatively

• Fit Must have expertise within CommonAngels
  membership
• People Passionate entrepreneur with CEO
  capabilities
• Stage Beta, working prototype, go-to-market
• Sectors Innovative, scalable information
  technology such as software, telephony,
  semiconductors, RFID, medical devices not
  requiring extensive clinical trials
• Location Boston Area
• Capital Series A financing of 500K-5M total
  capital lt20M with emphasis on capital efficiency

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Making Investments
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Example Investment Sand Video

• Team Had Worked With one of our Members
• Most MIT CS/EE
• Nine Founders
• Breakthrough Video Compression Chip
• Their 3rd Company
• Identified Markets DVD, PVR, High Def TV

• 8MM w/Baker Capital, Navigator, Oct 2002
• Sold to Broadcom for 77.5m, April 2004

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Example Investment Tizor

• Security Appliance
• Catches Insiders Gone Bad
• Team from Bell Labs
• Good Relationship between Founder our Experts
• Syndicated with 2 VCs
• 3m Series A, Apr 2004
• 12M Series B, August 2005

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Expectations of Membership

• Attendance 75 of the regular monthly meetings
  (meet 3rd Tuesday of each month location varies)
• Investment 50K-100K per year across 2 deals
• Participation One diligence team per year
• Membership dues 3,500 per year

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Joining CommonAngels

• Sponsorship Prospective members must be
  nominated for membership by an existing member.
• Meeting Attendance Prospective members are
  encouraged to attend several meetings as a guest
  before pursuing a formal application for
  membership. Visits should be coordinated with
  the Managing Director.
• Application Formal applications for membership
  should be coordinated with the Managing Director
  and applicants will be asked to provide a
  biographical summary.
• Review At least one member of the CommonAngels
  board of directors meets with the applicant to
  discuss shared goals and interests. The board as
  a whole reviews and approves applications for
  membership.
• Formalization New members should complete an
  accredited investor questionnaire and pay their
  annual dues.