F.A.Q.

CAV ANGELS

WHAT IS CAV ANGELS?

CAV Angels is a non-profit angel investor and educational network dedicated to bringing high potential startups with a strong connection to UVA to UVA-affiliated angel investors for possible investment. In addition to capital, our angel investors provide mentorship, experience, and networking to fellow members. CAV Angels offers a wide range of services to its members in order to contribute to their success (or future success) as investors.

WHAT IS CAV ANGELS’ TARGET INVESTMENT?

CAV Angels typically invests in Seed or Series A ($250K – $1M) rounds of technology companies in one of our targeted industries with a strong management team, demonstrated market traction, and a growing customer base.
CAV Angels can also participate in syndicated deals for startups requiring more than $1M in funding.

WHY CAV ANGELS?

UVA’s alumni base of over 200,000 people is a source of pride for all those that have graduated from UVA. Our alums include successful, experienced, active investors and entrepreneurs. There is also a strong alumni base just starting down their paths as investors who can benefit from CAV Angels’ educational opportunities and networking events. CAV Angels provides the platform for matching these different groups of alums with one another.

HOW WILL CAV ANGELS IMPROVE THE ENTREPRENEURIAL ECOSYSTEM FOR UVA ALUMS?

CAV Angels is committed to improving the UVA entrepreneurial ecosystem in many ways.
We believe there is a desire for UVA alumni to connect to other UVA alumni, but there needs to be proper forum and purpose to ensure the connection is sustainable and meaningful. CAV Angels provides an opportunity for potential investors and mentors in the broad UVA community to connect with high potential UVA-related startups.
In addition to helping UVA alum’s startups get connected, funded, and mentored, CAV Angels will also donate a portion of profits from carried interest to UVA entrepreneurial efforts and other UVA foundations and funds. The donation amounts and beneficiaries will be decided by a committee of the members.

FOR INVESTORS

WHO QUALIFIES FOR MEMBERSHIP WITH CAV ANGELS?

CAV Angel members are UVA alumni or otherwise affiliated with UVA. This includes alumni, students, faculty/staff, researchers, parents and others with a strong UVA affiliation.

Although our membership is only by invitation, we are currently seeking charter members with exceptional backgrounds in startup and early stage investment.
All CAV Angel members must qualify as an “Accredited Investor” as defined in Rule 501(a) of Regulation D under Rule 144 of the Securities Act.

WHAT IS ANGEL INVESTING AND WHAT IS AN ANGEL INVESTMENT CLUB?

Angel investors generally are successful individuals who invest their own funds in early stage and startup companies. In addition to providing funds, angels often also provide advice, referrals, and mentorship to the companies they invest in. Though many individual angels invest on their own, more and more are discovering the benefits of the diverse experience/knowledge base and higher quality deal flow that comes from membership with an angel club.

Additionally, many more individual angels are finding the satisfaction and advantages of working with “affinity” angel clubs like CAV Angels. In addition to finding high potential startup investments for our investor/members, we also provide additional funding avenues for UVA Alumni startups from all over the country, increasing networking/mentoring opportunities and improving the UVA entrepreneurial ecosystem.

WHAT DOES THE INVESTMENT PROCESS LOOK LIKE?

Once a startup passes our initial screening, active members will be informed of the new opportunity on the online Gust angel investment website. Gust allows active members to access all due diligence and corporate information. The due diligence process will begin only if one or more of our active angel chooses to lead the deal, and we will schedule online (and depending on the region, in-person) conferences with the deal leads and the company representatives to review the proposed deals.

At the end of the due diligence process and term sheet negotiations by the deal leads, members vote on whether and how much of their own capital to invest in a particular company. Anticipated minimum investment per opportunity is $25,000 per member (including a reserve for annual administrative expenses), with an anticipated minimum total round size of $250K. As CAV Angels is an “opt-in” club, each active member may choose whether or not to invest in any particular opportunity. If a critical mass of interest to invest is reached (ten members or $250K), CAV Angels will form a single purpose LLC to invest in the startup.

WHO CONDUCTS THE DEAL SCREENING AND DUE DILIGENCE FOR CAV ANGELS?

CAV Angels relies on the expertise of its diverse and knowledgeable member base to lead the screening and due diligence of applicants. CAV Angels also employs a small staff of experienced professionals who supervise UVA graduate and undergraduate students in gathering due diligence and related information for the members.

Like most angel groups, CAV Angels does not recommend or endorse companies for funding. Instead, investment decisions will be made by individual members based on the due diligence information provided by the applicant companies and thoughts/opinions shared between members.

WHAT RISKS AND RETURNS CAN AN INVESTOR EXPECT?

Angel investing, and early stage investment in general, is very risky. Even with the most thorough due diligence and research, angel investors can expect about half or more of their investments to fail or barely return the amount invested. So angel investment is only appropriate for experienced and knowledgeable investors (SEC accredited investors) who can make their own investment decisions, will take the time to build a diverse portfolio of investments, and can absorb the expected financial losses in anticipation of the few “winners” that angel investment may bring.

For more information on angel investing and industry returns, please see the ACA (Angel Capital Association).

HOW WILL REMOTE INVESTORS STAY CONNECTED?

Our goal is to build a nationwide (and eventually international) investment network with the help of regional members. This way, alumni from all over the world can both invest and find funding. CAV Angels uses industry leading IT platforms, including the Gust on-line angel investment platform, to make this possible.

The Gust platform provides for the posting of all the necessary company information for investor review and due diligence. The on-line nature of the system allows members to remotely access and evaluate company information at their leisure anywhere the internet is available.

Additionally, although we will hold regular member’s meetings in Charlottesville, remote members may also participate via teleconference.

FOR ENTREPRENEURS

WHAT TYPE OF COMPANY IS CAV ANGELS LOOKING TO FUND?

Your company should be a technology or healthcare startup looking for Seed or Series A funding, with a strong team and a working product or prototype in an industry that CAV Angels is currently interested in funding.

A founder, major investor or board member should be an alum of UVA or otherwise affiliated with UVA (parent, faculty, researcher or other).

WHAT IS THE AVERAGE AMOUNT OF FUNDING CAV ANGELS WILL INVEST?

Assuming that the company passes all vetting and due diligence, and the members vote favorably to invest, CAV Angels will generally invest between $250K – $1M in any one opportunity. As all active members make their own investment decision, any actual investment total depends on the company’s needs and member interest in investing.

WILL CAV ANGELS WORK WITH OTHER ANGEL GROUPS AND VENTURE CAPITAL GROUPS?

Yes, CAV Angels will generally invest and collaborate with other angel groups and investment funds.

HOW DOES MY COMPANY APPLY FOR FUNDING THROUGH CAV ANGELS?

CAV Angels uses the online angel funding platform Gust for startup funding submissions. The Gust system is an industry standard platform for the startup/angel funding industry used by entrepreneurs, individual angels and angel groups across the country.

Please see the Entrepreneur Information page for additional details.

WHAT DOES CAV ANGELS’ SCREENING PROCESS LOOK LIKE?

Please see the Screening Process section for details on what you can expect.