What is an Angel Investor?
Angel investors are worthy of their name. Beyond financial investment they bring a generosity of spirit, willingly sharing advice, knowledge and experience to startups.
Typically the financial commitment is just one piece of the pie. Angel investors often become actively involved in the business, either in a board or mentor role.
They bring welcome experience and connections, along with sound advice on developing management teams. As the start-up develops they may help guide capital raising, strategic partnerships and ultimately exit strategies.
What makes ArcAngels investors unique?
Our investors hail from a diverse range of backgrounds. Age, gender or work experience are inadequate definers but they do have a common motivation that goes well beyond anything financial.
Whether they’re successful entrepreneurs, active professionals or high net worth individuals, ArcAngel investors share a genuine interest in developing women-led businesses and female leaders.
All are committed to giving back to the business community. But they also relish the exposure to young businesses in emerging industries, adding to their own learning.
How does investment work?
Our process ensures a diverse range of high quality companies for investment, with a focus on for-profit organisations.
The ArcAngels investment process typically involves:
Screening Meeting to meet the entrepreneur and company
Company presentation at a Member Meeting
Deep Dive Meeting with the entrepreneur before formally structuring a Deal Team
Formation of a Deal Team for due diligence
Making the investment
Monitoring the investment
Burn rate - the rate at which a new company spends its initial capital.
Churn rate - the annual percentage rate at which customers stop subscribing to a service.
Dilution - reduction in the ownership percentage of a share of stock caused by the issuance of new shares.
Ordinary Shares - shares which have a lower priority for company assets and only receive dividends at the discretion of the corporation’s management.
Monthly Recurring Revenue (MRR) - the income that a company can reliably anticipate every 30 days.
Minimum Viable Product (MVP) - a product with just enough features to gather validated learning about the product from customers.
Preferred Shares - shares which have the advantage of a higher priority claim to the assets of a corporation in case of insolvency and entitles the holder to a fixed dividend.
Pre-money Valuation - The company’s value immediately before funding. If post-money valuation = $2.5M and the company raised $500K, then the pre-money valuation = $2M.
Post-money Valuation - The company’s value immediately after funding. If pre-money valuation = $2M and the company raises $500K, then the post-money valuation = $2.5M.
Term Sheet - a document outlining the material terms and conditions of a deal. Once the parties agree, more detailed legal documents are drafted consistent with the terms laid out in the terms sheet.
Vesting - A process in which an employee or founder earns stock over time. In essence, vesting protects founders from each other and aligns incentives so everybody focuses towards building a successful company. A typical vesting period might be 3 - 4 years, which would mean they would earn 25% of their stock each year over a 4 year period. If they leave early, the unvested portion returns back to the company.
"Early-stage company investment valuations in New Zealand" - NZVIF Report, 2016.
"The business of angel investing in New Zealand: A guide" - NZVIF Report, 2007
"Women at the Wheel: Do female executives drive start-up success?" - Dow Jones, 2012.
How do I know if I am an eligible investor?
You must meet the definition of a Wholesale Investor as defined in the Financial Markets Conduct Act (FMCA), in clause 3, Schedule 1. Please contact us if you have any questions.