Angel Investor FAQs
Q: How do I know if I meet the SEC’s formal definition of an “accredited” investor?
A: One of the main requirements for becoming an accredited investor is to complete an Angel Investor Disclosure Form. These forms are available if you are acting as an individual or as an entity. We provide these forms for download on our Angel’s Resource Page.
Q: Are there any fees to participate?
A: We currently do not require Angel Investors to pay a fee to participate.
Q: How does FSI afford to put on these events and offer this Angel organization service?
A: FSI is a non-profit 501c3 corp., which has raised money from regional sponsors ranging from public, private and foundation funds to the Federal Govt. We manage this budget like any other corp. and decide whether to invest it in order to make the highest value impact on the entrepreneurial ecosystem. Please tell us your ideas!
Q: What if I want to find and communicate with other Angels in FSI’s Network? Can I do this?
A: Stay tuned. We are adding this feature to our web site. Please note that there can be NO SOLICITATION for business services when this is offered- only for the purpose of networking around specific deals.
About the FSI Angel Network
What's Different About First State Innovation, compared to other Angel Investment Groups?
If you’re new to Angel Investing, check out the “Suitability” section first.
FSI’s Network of Angels is an informal group of 230 high net worth individuals.
85% of FSI’s Angels are based in DE. The other 15% are in the DE Valley Region.
FSI Angel network has only two requirements for joining its network.
- Can write a check for minimum of $25,000 in a deal.
- Is an Accredited Angel Investor, and can write a check for minimum of $25,000 in a deal.
FIS’s Angel Network does not pool its funds. Each Angel decides what deals to invest in.
Joining FSI's Angel Network does not require any fees or upfront investment.
FSI does not endorse or recommend companies to invest in.
FSI invests in staff, events, and venues to communicate deals that should be of interest to its Angel Network.
FSI’s Angel Network has a broad and a diverse technology-based background, split roughly into these focus areas:
- Biotechnology & Life Sciences
- Advanced Materials
- Information Technology
- Nanotechnology
- Financial Services
- Supporting Infrastructure
Disclaimer: FSI acts only as a “finder” and not as a solicitor. FSI only makes introductions. FSI has not and will not participate in the solicitation, negotiation or any execution of any investment opportunity. FSI is not a broker-dealer or investment adviser and is not registered as such with any securities regulator and will not be paid a brokerage commission for its services. FSI makes no representation, warranty or guarantee as to the accuracy, completeness, reliability of any material supplied by the companies to which a prospective investor may be introduced. Prospective investors must deal directly with the companies and parties to which they may be introduced and make their own decisions of the pertinent facts relating to the operation and prospects of each company.
Suitibility
Starting Out? Are You Already Angel Investing? Here are some General Facts about Angel Investing:
- An angel investor is a person who invests money into someone else’s business, in order to get an attractive return.
- Angel Investors usually invest in companies after the Founder has gone through seed money from “Friends and Family.”
- Many Angels want to be actively involved in the business, and usually seek to invest in business that are familiar to their background.
- Angels understand that they can lose 100% of their investment.
- Angels’ ROI varies greatly, from losing everything to 50x multiples, which is why it’s important that you understand your own motivations for investing. The risk involve early stage investing as a segment, where the venture team have to overcome all three general types of risk: technology risk (does it work?), market risk (is the market there? Now?,) and management risk (is the team experienced, full and competent?)
- Additional risks of early stage investing is that if a company has not grown sufficiently or met its milestones, a common occurrence is that future investors will demand difficult terms and give lower valuations than expected. The earliest stage can involve the greatest returns, but also the Angel should be aware of the “cram-down,” because most companies will require future rounds of growth capital.
- Angels should be “accredited.” The SEC’s definition of an Accredited Angel Investor is someone who earns over $20,000 a year for three years or for two years if they have a reasonable expectation of earning more than $200,000 in the current year, or someone who has net worth in excess of $1 million.
Success Story: Leading Edge VentureS
Leading Edge Ventures Press Release:
EARLY STAGE VENTURE FUND LAUNCHED
Focusing on information technology, healthcare and other high growth companies in Delaware and the Mid-Atlantic Region
Newark, Delaware, July 7, 2014- Leading Edge Ventures I, L.P, announced today the formation of an early stage venture fund. Headquartered in Newark, Delaware, the Fund will make investments in promising early stage companies in Delawareand the Mid- Atlantic region. It will also maintain an office in Bethlehem, PA. Leading Edge Ventures will target companies that provide productivity benefits to businesses and consumers in the areas of information technology, healthcare, and other high growth markets.
First State Innovation, an organization whose mission is to accelerate entrepreneurial activity in Delaware and the surrounding region, initiated the concept and has supported the Fund’s formation. Ernie Dianastasis, Chairman of First State Innovation said, “The launch of Leading Edge Ventures is a significant development for the entrepreneurial community and will provide great benefits to the region.”
Jack Markell, Governor of Delaware, commented, “Funding early stage companies creates new jobs for our local economy. We ‘re proud to have backed the creation of Leading Edge Ventures as part of our state’s commitment to supporting entrepreneurs so they can turn great ideas into thriving businesses”.
The Fund will invest in promising early stage companies with the potential to become leaders in their respective markets. The Fund’s initial investments will range from $50,000 to $250,000 per company and the Fund will invest up to $750,000 per company.
“Leading Edge Venture’s interest in this region is a testament to the wealth of opportunities here”, said R. Chadwick Paul, Jr., President and CEO of the Ben Franklin Technology Partners of Northeastern Pennsylvania.
The Fund’s management team includes five General Partners; Richard C. Birkmeyer, J. Michael Bowman, Jeffrey A. Davison, Douglas R. Petillo, and Vance V. Kershner. The team has over 50 years of venture capital investment experience over multiple business cycles and has over 80 years of diverse operating experience. The background and experience of the General Partners provides Leading Edge Ventures with a unique competitive advantage. The team is experienced in advising and assisting entrepreneurs and has deep industry knowledge and growth company operating and investment experience. The General Partners’ experience in a wide range of industries gives the Fund the opportunity to earn significant returns for investors and provide access to capital for early stage companies.
Leading Edge Ventures’ Advisory Board includes five highly experienced executives with substantial operating experience and a wide range of industry knowledge: Randy L. Christofferson, Managing Director of MIOGA Ventures, Rick Faulk, Chairman and CEO of Intronis, Inc., Charlie Horn, Founder and Chairman of ProPrivate Equity, LLC and founder of the University of Delaware’s Horn Program in Entrepreneurship, Brooks H. Pierce, Chief Revenue Officer, Gaming at Scientific Games Corporation and Ian Wright, President of Strategic Innovations, LLC.
Tatiana Copeland, an investor in Leading Edge Ventures, commented, “I invested in this fund because of the strength and experience of the management team as well as the fund’s benefit to the region. It is a rare to find the ‘win-win’ situation that Leading Edge Ventures represents”.
For more information visit the Leading Edge Ventures website at www.leadingedgevc.com or contact Jeffrey A. Davison, General Partner, Leading Edge Ventures, Delaware Technology Park, One Innovation Way, Suite 301, Newark, DE 19711. Phone: (302) 452-1120. Email: jeff@leadingedgevc.com.