WHO CAN BE A MEMBER OF 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 INVESTMENT 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 working 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 are also providing additional funding avenues for UVA Alumni startups from all over the country, increasing networking/mentoring opportunities and improving the UVA entrepreneurial eco-system.
PLEASE GIVE AN OVERVIEW OF THE INVESTMENT PROCESS.
Once a startup passes our initial screening, active members will be informed of the new opportunity on the on-line 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 on-line (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 (for example, ten members or $250K), CAV Angels will form a single purpose LLC to invest in the startup.
WHO DOES THE DEAL SCREENING AND DUE DILIGENCE?
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 I 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.
In other words, angel investment is only for experienced investors who understand the nature of high risk, early stage investments and are prepared lose their entire investment.
For more information on angel investing and industry returns, please see ACA (Angel Capital Association).
HOW WILL CAV ANGELS REACH THE REMOTE ALUMNI? HOW WILL REMOTE ALUMNIS PARTICIPATE?
Our goal is to build a nationwide (and eventually international) investment network with the help of regional Members. This way, alums 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.