What kinds of businesses should I invest in?
An Angel should look to invest in small businesses operating in sectors or business areas that he or she understands or has experience in. This helps the Angel to recognise the market and business opportunity and can apply his or her knowledge skills and contacts to help them grow.
How many investments should I make?
It is advisable to take a portfolio approach and invest in more than one company to give a spread of opportunities to diversify investor risks and maximise opportunities for returns.
Should I invest alone or in a group?
Potential Angels who are new to angel investing should consider investing alongside an experienced Angel or as part of a group of Angels or syndicate. This enables them to pool their finance and their skills to maximise their opportunities. By investing alongside others in a syndicate, Angels will be spreading their monetary risk. As a result, syndication is a beneficial and proven model of Angel investing. A syndicate normally comprises of at least three Angels who are investing together.
How does syndication on a deal-by-deal basis work?
On an ad hoc basis, Angels could form a syndicate around an opportunity. This happens when Azione presents investment propositions where Angels can meet other Angels with whom they could co-invest. Azione enables groups of Angels to come together on a deal-by-deal basis according to their interest in a particular opportunity.
Normally, they would identify a lead Angel who acts as the interface with the management team in co-ordinating the due diligence and agreeing the final negotiations and would then generally act for the syndicate in following the deal. All Angels will sign the term sheet and other legal documents and subscribe to the shares as individual investors who are responsible for their own investment decisions.
How does creating a formal syndicate work?
If Angels are investing regularly with fellow Angels and are looking at investing together in different deals, Azione would enable them to set up a more formal syndicate structure and would advise on using standard investment documentation. We would also help with regulatory compliance and assist with facilitating legal advice.