Our recent capital raise with SquareOne was achieved in six weeks from initial contact through to settlement of funds. During this time, working closely with SquareOne, we reviewed investment material, organized an opportunity to Pitch to our members, undertook due diligence (DD), collated member interest, worked with investors and finalised their commitments, completed investor compliance for 37 investors, and transferred funds.
Almost a third of the total $2.1m raised by SquareOne in this round came from Enterprise Angels. 30 members and 7 additional wholesale investors made investments directly through our nominee and a $75k investment was made by EA Fund 3.
The capital raising process is not an easy one, and not all deals are processed within this succinct timeframe, but it is something Enterprise Angels aim for. Here are some of the key components that we believe drive efficiency, and enabled the quick turnaround for SquareOne:
Pre-prepared high quality investment material – To be investment ready founders need to have prepared all the information required to present to potential investors. This includes a one-two page summary of the business, a pitch deck, and prepared in-depth information available for our members to undertake due diligence quickly.
Responsive, honest, and coachable founder – Jovan Pavlicevic, SquareOne’s co-founder was very efficient and great to deal with which sped up all aspects of the process. He also took onboard any suggestions to make improvements to increase his probability for success.
Clear, concise pitch delivery – Pitching to Angels is a founder’s opportunity to “set the hook” with prospective investors. Within the 5-minute time allocation the goal is to create curiosity, not closure. Framing a pitch in this way is important as it means that the founder does not need to tell investors everything they have achieved or plan to do, just enough high-level details to get them interested.
Availability of pitch recordings to share with a wider audience – Enterprise Angels record pitches enabling us to share with a wider audience of members and prospective investors who are not able to attend on the night. Founders are also given a copy of the recordings to share with their networks.
Efficient measures and processes in place to gauge member interest – Feedback forms and indicative commitments are requested during the pitch events and subsequent email request are sent also to ensure all feedback is fully collated and we can provide the founder with an indicative investment amount.
Quick successive DD Q&A call post pitch night – With prepared in-depth company information already available from SquareOne and diary availability arranged, Enterprise Angels was able to quickly organise a DD Q&A call following the positive response from Pitch Night. The DD Q&A call was also recorded allowing it to be shared with any interested parties who were not on the call.
Proactive and experienced members – The key benefit of Enterprise Angels is our membership, which is comprised of experienced businesspeople with a broad range of skills and experience. Members make individual investment decisions but do so together drawing on each other’s experience and expertise. We ensure members with a range of expertise are involved in the DD process to ensure all aspects of the deal are considered.
Existence of a sidecar fund to offer additional investment capital – As mentioned above, EA Fund 3 invested $75k into SquareOne. Having Funds enables us to provide additional capital to founders. By co-investing with members, the EA Funds leverage the DD and deal preparation of our professional team and experienced angels.
A strong wholesale investor network – Enterprise Angels offer select deals, like the SquareOne opportunity, to our database of non-member wholesale investors throughout New Zealand, and globally, giving them access to early-stage investments opportunities and increasing the potential investor pool.
Efficient system and processes around compliance – Enterprise Angels has invested in over 100 start-ups and this extensive experience provides seamless facilitation of the capital raising process. We are a team of professional staff supported by robust and efficient processes for our investors and founders.
Good and open communication between founder, Enterprise Angels, and investors – The capital raising process is not an easy one, so timely value-add feedback and clear communications with all parties throughout the process is key.
The whole Enterprise Angels team is super-professional and easy to deal with. From start to finish, they made everything simple, transparent and painless. Highly recommended!
– Jovan Pavlicevic, SquareOne
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