What is an Angel Investor?
Angel investors are wealthy individuals who invest in high risk, early stage ventures by reserving a portion of their total investment portfolios to provide emerging companies with seed and startup capital through direct, private investments. Their goal is to achieve higher returns than the typical public markets provide.

Most angels are active investors - who contribute their time and experience, as well as offer introductions to valuable contacts essential to the company's success - because they enjoy the thrill of helping entrepreneurs grow their businesses. To maximize the value added, most angels specialize in industries or technologies they understand, and invest only in companies within close geographic proximity.

Angels typically invest between $25,000 and $100,000 per transaction individually, and up to $500,000 as a group. They invest in one to four transactions per year. On average, angels are patient, with an average term for holding an investment of eight years. For the risk and added value they provide, angels seek returns of at least ten times their investment.

Because the capital is being invested at a risky time in a business venture, the angel must be capable of taking a loss of the entire investment, and, as such, most angel investors are high-net-worth individuals. These individuals are nearly always “accredited investors” as defined under the Securities Act of 1933.

MIT's Entrepreneurship Center identifies four types of angel investors:

Guardian Angels.
Bring both entrepreneurial and industry expertise. Many have been successful entrepreneurs in the same sector as the new companies in which they invest.

Entrepreneur Angels.
Have experience starting companies but come from different industry sectors.

Operational Angels.
Offer industry expertise - often from experience working for large, established companies - but may lack first-hand experience with the travails of a startup.

Financial Angels.
Typically invest purely for a financial return.

What is an Angel Group?
Angel investor groups vary in structure, from formal to informal. Formal groups follow strict participation requirements that guide members' minimum investment activity and event attendance. Some groups pool members' capital to make investments on the group's behalf, while others allow individual members to invest in specific deals of interest.

A typical angel group's investment ranges widely from $50,000 to $500,000 per deal, depending on how many group members are interested in the deal. While no two angel groups operate exactly alike, most angel groups maintain a local or regional geographic focus in order to maximize members' ability to actively engage in the growth of their investments. Angel groups often have web sites that provide directions for business plan submission. After screening business plans for top-quality deals that match the group's criteria, these groups organize regular monthly breakfast or dinner meetings for members to hear pitches from companies selected to present. If the group (or members of the group) decides to proceed, interested members commonly collaborate on due diligence and deal negotiation. Based on the group's structure, investments are either made directly by individual members, or by the group as a whole. Most groups apply standard terms to their investments, with some flexibility to negotiate.

Is membership in AIN restricted?
Yes. Please see the description of membership requirements above, and review the entire content of the Membership Agreement.

How do I learn more about angel investing?
AIN conducts periodic training programs for new members as an intensive introduction to angel investing. Additionally, AIN hosts speakers on topics relevant to private equity financing and offers materials and templates online which are useful to active investors. Members are also encouraged to learn from other experienced AIN members.

Must I make a minimum number (or amount) of investments each year in order to remain a member?
No. Alaska InvestNet’s goal is to bring together high-caliber entrepreneurs with potential investors in an effort to nurture the private equity markets of Alaska. All decisions relating to investments are at the discretion of individual members.

How will investment decisions be made?
Each individual member of Alaska InvestNet will work independently or with other members to conduct thorough due diligence on companies introduced through AIN events. Member investors then make their own decision if, how much, and under what terms to invest in companies that present to the group.

How will presenting companies be selected?
Companies in search of funding will be required to submit business plans in Executive Summary form as outlined by AIN’s Funding Application. Initially, plans are screened by the Executive Director and staff of AIN. Top-tier candidates will then by submitted to the AIN Screening Committee, a revolving committee of AIN members who conduct surficial due diligence and, as decided by the committee, interview individual companies. The committee ranks potential companies and makes recommendations to the Executive Director for presenters to the next investor meeting.

How is AIN run?
Alaska InvestNet is a 501(c)3 not-for-profit organization run by an Executive Director and staff. Organizational oversight and strategic planning are conducted by AIN’s nine-member Governance Board. The board members represent diverse professional fields including: angel investors, entrepreneurs, corporate management professionals, attorneys, nonprofit managers and academics.

How is AIN funded?
Alaska InvestNet pursues a wide diversity of revenue to support its operations, services and events. Member dues, grant resources, charitable contributions and event registration fees all contribute to the financial health of AIN.