We prefer early stage / seed stage investments and exiting over 2 to 3 years time frame through further fund raising, Merger or Strategic Acquisition.
The Angel member typically makes investments by direct subscription of shares in to the company. All investment decisions will be made individually by the investor or the institution that will be solely responsible for their decisions. Secretariat will not do the due diligence related to the numbers and the viability of the business model.One or two Angels can assign themselves as Deal Champion for the investment they are making in concurrence with the Angel group investing.
Typically, all the members will invest some amount of time in strategy and other operations of the company in the spirit of entrepreneurship. Deal Champion(s) can negotiate with other angel investors to incentivize himself or herself, if they spend considerable amount of time compared to other Angels.
Deal Champion may or may not be the largest investor in terms of investment of capital among the Angel investors. Deal Champion(s) may negotiate on be-half of all the other investors with the entrepreneur.Angels who are interested in a particular investment will meet as a separate group away from the Monthly meeting to work the details of the investment. It is expected that an investment decision will be communicated to investee within 60 days of short listing by the secretariat. It is entirely up to the sub-group members to mutually agree on the amount of individual investment, select a deal champion among its sub-group members, and the incentives to be given to the Deal champion (s).
Deal Champion(s) may lead the discussion on the deal valuation, structure and closure of the deal with the investee. Each of the sub-groups of the separate investment may meet on ad hoc basis to discuss the investment. Secretariat will not be involved in such meeting and will keep a record of such meetings for tracking purposes only.Not all investments by the angels may of same size and all the angels may have the same background. Angels of different background are encouraged to invest to give a different perspective. Additionally, Angels may invest in a company at different times at different valuations and at each round new Angel investors may join.
It is expected that the Angel Members will work jointly with the entrepreneur to make the venture successful, where they have put time and money.Angel Investors Sub Group will work with the investee in selecting a board member(s), advisers among its members who will spend considerable time in guiding the company. This member may or may not be the Deal champion(s).Such Board members and advisers may be compensated by the investee company for their time and services. All Sub Group members are to be informed of any decisions taken related to the compensation and benefits derived.
Member Angels and strategic alliances with other angel groups will be the primary source of deals. Deals typically will come based upon word of mouth, contacts of members, and marketing of the organization, web site and other internet marketing tools such as Twitter and Facebook.
The Secretariat reviews all the applications. If, after reviewing the business plan, Secretariat believes that the idea could be an attractive investment opportunity for some of our Members, then the secretariat collects further information by meeting the startup personally or through phone calls. Once the secretariat is satisfied then they forward the details with their comments to the Deal Screening Committee.
The Deal Screening Committee (DSC) then finally vets the applications and shortlists few applications further. The DSC then engages in an interactive session with the shortlisted teams via voice / video conference. Based on the conversations, they select 3 who will be invited to deliver a pitch to the members. Please note that we will only invite the entrepreneur to one of these sessions if we believe the entrepreneur has a realistic chance of securing funding from our Members, therefore a significant proportion of applications will be turned down without the Calcutta Angels ever meeting the entrepreneur in person.
Each company would be allocated a 25 minute slot (10 mins presentation and 15 mins Q&A). In order to proceed to the next stage in our process, the company will need to secure a Deal Champion that is already a Member of the Calcutta Angels.
Like most Angel groups, the amount of time that we invest in due diligence is directly correlated to the amount being invested. However, each member will look at the deal individually and holistically to see if the deal is appropriate based upon host of criteria such as risk appetite.
This is because Angels invest their own money, and therefore choose to rely on their instinct, experience and the opinions of other Members, rather than relying on an expensive and time-consuming due diligence process designed to verify the statements made in the business plan, presentation, and financial projections.
However, as many of Angels primarily invest in people, they are likely to want to hear more about the team’s background and track record. If the entrepreneur play’s an active role in facilitating this process, it will help to expedite a final investment decision from our Members.
After successful completion of the due diligence process, interested Members will present the entrepreneur with a Term Sheet that defines the structure of the investment deal – including the amount / type of equity, as well as rights relating to our representation on the board of directors, amongst other things.
When all the parties are satisfied with the terms and language contained in the Term Sheet, the deal can be executed. Both sides may wish to instruct legal counsel to assist in the final negotiation and drafting of Shareholder Agreements, etc, and if for any reason the deal does not close then our Members’ legal costs will be borne by the Interested Angels. However, please note that it is much more common for the deal to close relatively smoothly at which point our Members’ legal costs will be passed on to the entrepreneur (subject to the cap in fees agreed during Step 5).
Note: Members will invest directly into the company not through Calcutta Angels. Calcutta Angels will only facilitate the deal.
Closing the deal is only the beginning of the involvement of Calcutta Angel’s in the company. The main reason Angels groups have been so successful to date is because of the active involvement of the deal champion in mentoring the business in the long-term. They are able to proactively leverage not only their own network of contacts, but also the contacts of every other Member of our group – as well as helping to arrange discussions with other investors for “follow-on funding” should the business plan require this.
Calcutta Angel Network believes that early stage businesses require more than just money to succeed. They require close mentoring and inputs on strategy as well as execution. The Network aims at enhancing the success rate of early stage businesses significantly through mentoring, networks and inputs on strategy as well as execution. The Network enables members, to come together and use their experience and their skill set to better able to assess the potential. Calcutta Angels is a network of Angel investors keen to invest in early stage businesses, which have potential to create disproportionate value.
No person outside of the Angel membership can participate in the sub-group meetings, unless specifically approved by all investors to help evaluate the investment. They will not be authorized to invest.
It is expected that no Angel member will cut a deal with the entrepreneur individually after the monthly meeting. If it comes to the notice of the organization that such a thing has happened, disciplinary proceedings will be conducted and if proven guilty, membership will be suspended. Investee will also be never allowed to seek funding from the organization.
Similarly, Angel members are expected to follow strict code of ethics and conduct. Any deal discussed will not be deliberated by its members outside of the monthly meeting. If it comes to the notice of the organization that such a thing has happened, disciplinary proceedings will be conducted and if proven guilty, membership will be suspended. Investee will also be never allowed to seek funding from the organization.
Information about deals discussed in the meeting(s), should not go beyond the four walls and angels will adhere to the code of confidentiality. Angels will not inform any other person or organization and will not make private deals with the entrepreneur without the consent of the Managing Committee outside of the Calcutta Angel. Also member or institution should not have a parallel discussion or enter into an agreement with the entrepreneur while the discussions between Angels and the entrepreneur are in progress.
If any Angel member has already worked with the entrepreneur or seeking funds on behalf of the entrepreneur, Angel should notify the secretariat immediately. And if he or she becomes aware of such a deal during the monthly meeting, Angel should notify the other members and may have to excuse themselves depending upon other members wishes for that particular deal.
All members have signed a document adhering and abiding by the above principles.