Frequently Asked Questions
What is the Band's track record?
The Band has invested more than $231M into 277+ companies since 1994. Of these 55 have been acquired and 10 have gone public on the Nasdaq.
What makes the Band different?
The difference is primarily in the people. The Band is made up of 150+ successful business leaders available to assist companies develop from startup to IPO. These experiences enable our portfolio to quickly and successfully build their companies from the ground up.
What is the non-financial value of the Band?
Members of the group are one phone call away from anyone important to a young company. The network effect of the Band is both vast and indescribable. Many deals that presented to the Band but that did not succeed in raising funds from the Band nevertheless were able to garner important business development opportunities, referrals for excellent employees, and valuable advisors or board members. Additionally, companies that get to the dinner will have been put through a diligence and review process that includes several hours of speech and presentation coaching and feedback from experienced venture investors-the net result is some valuable contribution from a professional process that should be of meaningful value to a young startup.
Does the Band syndicate?
The Band often syndicates with other small VCs and angel groups. Because of the group's reputation it is often asked to lead such financings. The Band has participated in co-investments and follow-on investments with all notable Silicon Valley VCs including: Sequoia, Kleiner Perkins, Mayfield, Trinity, USVP, August, Canaan, Greylock, Accell, NEA, etc.
How long does it take to receive investment?
The Band is made up of individuals who can act immediately. Occasionally, a syndicated deal will have another lead and a tight timeline. Members have participated in financings within 24 hours of the dinner presentation. However, if the Band is looked to as the “lead” on a financing, you should anticipate that it would take between 2-3 months for a deal to close.
Once the dinner has concluded our members will indicate their level on interest in your company. If a core group of members are interested in moving forward with the deal, Band of Angels will schedule a follow up meeting for you and those specific angels. At this stage you should be ready to provide our members with their requested materials and references.
Every deal is unique and a simple answer on term expectations is not possible. The guiding principle on terms is that incentives of everyone be aligned. If a Venture Fund makes 10 investments and 9 of them fail and one gets a 10x, the Fund has just broken even. Entrepreneurs must be motivated to make a hefty return for their investors. Likewise, the investors must ensure that entrepreneurs are consistently and substantially rewarded for their ongoing contributions and the risks that they undertake. With this guiding philosophy, the Band negotiates in the best possible faith to get to terms that proportionally and appropriate incentivize all parties.
Companies typically like to pitch to the Band as much to interest one of our members to join the board as to acquire seed capital. Most companies that receive funding from the Band also receive at least one Band members as a board member.
The Band likes high technology companies with strong teams, promising technology, big potential markets, solid barriers to entry, and IPO prospects. Since we like to be the first money into the deal we recognize that for seed stage companies being certain that a company is all of these things is impossible—that is what makes investing at this stage risky. However, the more a company is like this, the more likely it will succeed in raising money from the Band. Because we do invest very early, preferably the first money into the deal, valuation expectations are very low.
Our preference is to invest in companies located in Northern California so that we can remain active with our portfolio throughout the early stages of development. There are exceptions to this rule with investments in Southern California, as well as a scattering around the country. However, 95% of the Band's portfolio companies are local and generally non-local deals will not be reviewed by the Deal Screening Committee.
Your plan needs to offer us enough information to determine the strength of your team, market and technology. Beyond that we need to understand your business model and financial projections as well as your capital requirements and the milestones you will reach with this investment. Your executive summary should also include specific information on your customers and competition. However, it must do all this in an incredibly concise way. If selected to attend the Deal Screening committee your company will be required to write an executive summary that includes all this information in one page. Why not do that now? Companies that can accurately convey themselves within a one page narrative are much more likely to score well in the pre-screening process?
What should the Executive Summary cover?
Since we receive so many plans our policy is not to sign NDAs (non-disclosure agreements) or confidentiality agreements. The Band prides itself on our practice of the highest respect and care of the confidentiality of all information received; aiming to treat you as we ourselves wish to be treated. However, you should not, under any circumstance, forward confidential or proprietary information to us.
Do you sign NDAs?
There are no fees to submit or present to the Band of Angels. In fact, companies selected for presentation to the Band receive several valuable things for free: several hours of speech coaching and document preparation, feedback from venture experts, and dinner and lunch at the presentation meetings. Additionally, Band members provide numerous hours of free mentoring to early stage entrepreneurs at the monthly industry-specific Special Interest Groups (SiGs), Office Hours, and at the annual Mentor Day. Companies that succeed at raising money from the Band are asked to voluntarily allow the Band of Angels, LLC to purchase a small amount of common stock at fair market value - Right to Invest in Common (RTIC).