Lead Angels Association for Entrepreneurship Development is a not for profit company that facilitates early stage investing. The company itself does not participate in investments and acts only as a facilitator and undertakes secretarial functions on behalf of Lead Angel Network members.
Lead Angels does not charge any fees from the entrepreneur. However they have to make their own arrangements towards travel and accommodation to Lead Angel Chapters. In case Lead Angels Network investors sign a mutually agreed termsheet, the company will have to bear the cost of Legal & Financial due-diligence and also the cost of preparing the documents. The agencies will be identified by Lead Angels but the payment will be made by the company. These charges/ fees normally do not exceed Rs. 150,000. Please note that the payment will have to be made irrespective of the outcome of the due diligence.
Lead Angels and its members see a large number of business plans and it is not possible to sign NDA’s with each startup. Entrepreneurs are advised not to share such confidential information that may impact their business.
Please share your valuation expectations with the Lead Angels team before you confirm your interest in presenting. While valuations are largely based on negotiations here is some information, the average valuation for angel networks is Rs. 10 crores post money. In case your company is pre-revenues or has revenues less than Rs. 10 lakhs the valuations are usually be below this mark. Companies with substantial revenues or with a team with strong domain experience a higher valuation can be expected.
The typical raise that Lead Angels members together can support is around Rs. 100-150 lakhs. However in association with other angel networks this figure could go upto Rs. 300 lakhs. Timeframes for companies raising more that Rs. 150 lakhs could be higher.
The typical timeframe for angel investments is around 3 months from the date of the first presentation. These could however vary depending on the amount to be raised, the time spent on negotiation, due diligence and legal documentation.
The typical terms of investment include an appointment of a board observer from one of the investors whose confirmation is required for certain decisions made by the company. They also include a clause to ensure that the investors receive a certain minimum return on their investment in case of acquisition before other shareholders can receive their share of the proceeds.
Post the presentation if there is sufficient interest, one or more members undertake a business due-diligence of the company to understand the business better and its future plans. After this stage the investment terms are finalized with the company. In the following meeting(s) of investors within the next thirty days, the findings are presented to all members. At this stage each member takes a decision to invest and if yes the quantum of investment. Thereafter a term sheet is issued to the company and if accepted by the company this is followed by a legal and financial due diligence. If the company passes this stage then the documents relating to the investment are executed between the company and each individual investor.
This is a decision the company has to take. However, since the terms are fairly standard and keeping the legal costs in mind, the company could take help from friends to understand the implications of the legal clauses if required.
We expect companies shortlisted for presentation to provide information to the best of their knowledge in their own interest. If at any point of time it is found that the information submitted is incorrect then the investment process is likely to be cancelled. Companies should also share any material change that occurs during the process of the investment or due diligence that may affect the investment. In case they are also engaging with other investors, companies should keep the LA team informed of such developments.
Also once the company confirms its willingness to present to Lead Angels they should make their travel bookings and send copies of these to Lead Angels team. Companies should appreciate the effort and time spent in information sharing and organizing the monthly event.