Why Join a Network? – Guest Post by Angel One Intern Sam Houpt
More so every year, angel investors are discovering the benefits to joining an investor network. Though being an independent angel provides its unique advantages, angel networks present a supportive and organized setting that can greatly increase investment efficiency. Angel One Investor Network not only showcases promising startups monthly, but also offers a considerable amount of professional consultancy and investment resources. The network approach results in diminishing the risk and time associated with angel investing, while also facilitating and nurturing member interaction.
It is common, and a good practice, for angels to diversify their portfolios to an average of 8 to 10 investments which consequently makes management difficult when working alone. Conversely, utilizing a team that includes investment management and a full -time business analyst gives an angel more allocated time to be a mentor without needing to be in constant check for information that can simply be relayed via a network.
Sharing experience with other angels in a network is another way to reduce risk. During the question and answer period after a presentation, members with a greater industry-specific knowledge may ask questions that other members had not considered. Through syndication, Angel One utilizes the shared expertise of its members to make the most informed decisions regarding whether a product or service is necessary in its market.
In a Forbes article covering, the strengths of joining an angel group, writer Marianne Hudson mentions how a team of angels can enrich each other’s investment experiences. “Angels get approached all the time by entrepreneurs in sectors outside their niche” she writes. “In an angel group, another angel is likely to understand the deal. They will lead the investment process and support to the company after the investment.”
Angel groups make short work of many factors contributing to investment time, such as: travel and meeting scheduling, sourcing and due diligence, and follow-up arrangements.
By joining an angel network, an angel investor has access to a database of entrepreneurs and start up companies. Here at Angel One, members of our network have the opportunity to review an average of 16 companies during monthly investment meetings throughout the year. An independent investor would have to contend with the caveat of a lengthy initial contact stage for each new interesting startup that happens their way. Later down the line, an angel network will also perform adequate due diligence before a deal is reached. This efficiency of time management is another reason contributing to network popularity.
While subsequently reducing the risk and time demands of angel investing, investor networks also offer angels immediate access to some of the most promising startup companies available. Rather than judging every startup initially at face value as a solo angel, network processing acts as a filter for its members. They showcase companies that have already passed initial scrutiny from trusted sources, bringing superior opportunities straight to investors.
In an editorial, Director at Pensco, Christopher Orr highlighted this contrast, writing that being a part of a vigilant network “opens the door to so many opportunities that most people would not normally see.”
In addition to providing members with this inside look at growth-stage companies, angel networks also host an environment for members to grow as investors. Each angel in a network is born from unique background and holds individual business expertise, giving everyone the potential of membership. The role of mentor applies not only to the portfolio companies, but to fellow investors as well.
Building on member experience, Angel One arranges educational seminars covering the fundamentals of angel investment. Thus ensuring all members have access to a broader understanding of how to successfully fund an entrepreneurial business.
The benefits of angel networks can be summed up as simple division of labor. Angel One applies every advantage a network offers by utilizing a team of professional investment managers while promoting member expertise and interaction. If you are interested in joining Angel One Investment Network, consider contacting our team: https://www.angelonenetwork.ca/contact/