Best Practices for Angel Investment Groups

From VC Experts

"Angel investing has long been an important source of financial support and mentoring for new and growing businesses bridging the gap between individual (friends and family) and institutional venture capital rounds of financing. Over the past several years, this sector of the private capital market has been formalizing in response to both growing demands and complexity.

According to research conducted by Jeffrey E. Sohl at the University of New Hampshire's Center for Venture Research, there were approximately 50 formal business angel groups in the United States five years ago. He now estimates that there may be as many as 170 formal and informal organizations located throughout leading technology and business regions in the US and Canada. These groups have several characteristics: loosely to well-defined legal structures; part-time or full-time management; standardized investment processes; a public face usually with a Web site and public relations activities; and, occasionally a traditionally structured venture capital/angel investing fund.

This week, the Kauffman Foundation reports on best practicesfor Angel Investing groups on topics as diverse as membership and staffing to deal flow and deal terms."