Business Angels - Investment process and criteria

INVESTMENT CRITERIA

The criteria for investments by the Business Angels Club members is:

Growth phase: Seed or early, spin-off or start-up companies. It is preferred that company is already founded, creates its first revenue or is just before creating it.

Range of the investment: from 50.000 € to 300.000 €. The investment is syndicated, e.g. more business angels invest in the project.

Investment mechanisms: proprietorial financing, convertible optional credit or other financial instruments.

Industry: No limits (except that business is ethical).

Time of an investment: from 3 to 7 years.

Required return on investment: at least 30% on a yearly basis (which means that investors require 3 times more money that they invested in 3 years or 5 times in 5 years. Of course it depends on a risk of a project. The expected return could be also 10 times of the investment or more).

Business angels of Slovenia want to invest in projects with high growth potential, exceptional management and potential exit strategy.

INVESTMENT PROCESS

Presentations of The Slovenian Business Angels Club

The purpose of the investment process is to identify and select the best entrepreneurial projects. That reduces the risk of a particular investment. Investment process has 4 key phases. Each phase represents an important filter of selecting appropriate projects for investments..

Phase 1: Board of directors The Slovenian Business Angels Club and training
When entrepreneurs come to The Slovenian Business Angels Club they often don't have an appropriate investment documentation. To provide entrepreneurs with proper knowledge, The Slovenian Business Angels Club designed a training in which entrepreneurs make a required business plan. Considering a business plan the investment model is made which is an official proposition of the club for an investment. After completing the training and finishing the documentation, a project enters the four phase investment process.

Entering the training and entering the investment process must be approved by the board of The Slovenian Business Angels Club. You can read more about the training here.

The board of The Slovenian Business Angels Club also coordinates entrepreneurial projects that are not yet ready for investment but they have a potential with institutions of the supporting environment. They are supposed to help the entrepreneur with development of their project.

Phase 2: The Consulting Committee
The consulting committee consists of member of the board of directors, technology experts and other experts. The committee then gives the opinion for investors and it also helps with preparing the presentation for business angels.

Members of the consulting committee are chosen considering the industry and nature of the project. Among the members of the committee should be a technology expert who evaluates a potential of technology and business experts who evaluates the feasibility and business potential of a project.

The consulting committee only evaluates the project and does not make any selection. In the case that business and technology risk is clear the committee is not formed and this phase is skipped.

Phase 3: First presentation to the business angels and interviews
In phase 3 entrepreneurs present their projects to all business angels. After the presentations business angels express their interest about presented projects. The club then coordinates a process of adjusting terms and expectations of an investment for projects with high interest. Afterwards a final range of an investment, who of the business angles will be a part of a syndicated investment, a share in a company and other terms are determined. Considering all the consolidated terms required legal documents are prepared.

After the presentations the expectations and interests should be consolidated as well as a lead investor and other associated investors should be determined.

A formal step: presentation at the investment dinner
The last, fourth phase, is the investment dinner, a social event at which the investment is made and all legal documents signed.

The Slovenian Business Angels Club reserves the right to changes the investment process in the case of the need to adjust it to the target groups.

TIMELINE OF THE INVESTMENT PROCESS

The investment process usually lasts from 3 to 6 months. There are made two rounds of the investment process - the spring and autumn round.

Expected start of the autumn round: October

Expected start of the spring round: March

Basically, projects could enter the investment process anytime and the procedure could be adjusted considering the needs of a project. For further information please contact us by email info@poslovniangeli.si.