2min read Why Should Angels Join More Than One Network?
Angel investors are high-net-worth individuals who want to invest in startups. This is often a part of a diversified investment strategy. Angel investors should join an angel group to maximize their returns on investments.
The process of investing in startups is time-consuming and often challenging. Angel investors can overcome this challenge by joining angel groups.
Angels join angel groups for the following reasons:
- Share the deal flow
- Share the due-diligence work
- Reduce the amount of investment required to participate
- Engage better startups
- Access investment tools, resources, and experience
- Negotiate better terms
- Build a brand
- Promote a cause
Angels join angel groups and networks to share the deal flow. The more investors in the group, the more deal flow is generated.
Diligence requires expertise, research, and analysis. By joining an angel group, investors can benefit from the collective due diligence process, which can help them make more informed decisions about potential investments.
An individual angel investor can invest small amounts through an angel network as the collective funding of the group meets the startup’s minimum requirements. This lets the angel investor fund more startups.
The more investors in the group, the more attractive that group is to a prospective startup. Angel groups can provide investors access to a network of experienced entrepreneurs and other investors who can provide valuable advice and guidance.
By pooling their members, angel groups have more access to experience and better investment tools and resources. The network leverages the collective knowledge and experience of the group.
The larger the group, the greater the funding can be applied to a startup. This attracts better startups who may have their ‘pick of the litter’ among investors. Size also helps negotiate better terms with the startup as their check size weighs in on the negotiations of the terms.
An angel group can build a brand that attracts more investors and more startups, whereas individual angels may not have a brand.
Finally, an angel group can foster a collective cause, such as providing a better education experience for university students. This is the primary reason university angel networks exist.
Angels should join more than one angel network.
Here are the reasons why:
- Access to a more significant number of deals
- Exposure to a wider variety of deals
- Engagement with more investor types and experience
- Access to new sectors and applications
- Increased network reach
Joining multiple angel networks provides a greater variety of deals as most angel groups are siloed into specific geographic or sector niches.
Additional angel groups provide access to other angel investors’ experience through their questions, diligence, and follow-up work.
Join other angel networks to learn how to invest in different sectors and applications.
Increase the angel member’s network reach by joining other groups.
Consider joining additional angel networks to find new investment opportunities and networking connections.
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Hall T. Martin is the founder and CEO of the TEN Capital Network. TEN Capital has been connecting startups with investors for over ten years. You can connect with Hall about fundraising, business growth, and emerging technologies via LinkedIn or email: hallmartin@tencapital.group
