IU Angel Network FAQ

Angel investors generally are high net-worth individuals who make high-risk, potentially high-yield investments in start-up companies or small businesses looking to expand their market opportunities. Angel investors typically focus on companies that have already developed a basic concept and business strategy, and are in the seed stage of investment. An emphasis is placed on business enterprises with the potential for rapid growth.

IU Angel Network members are required to be affiliated with Indiana University, be accredited investors, sign a membership agreement and pay annual membership dues of $1,500. Most IU Angel Network members are alumni of IU, but current and former IU faculty, staff, students, parents, and IU Ventures donors meeting the above described criterion are also eligible for membership. Qualified graduates from any of IU’s undergraduate or graduate programs are eligible for membership.

To be an accredited investor an individual must have over $200,000 in annual earned income (or $300,000 together with a spouse) or have a net worth of over $1 million (excluding the value of their primary residence). For more information on accredited investor requirements, please see the SEC’s accredited investor bulletin, including the information regarding calculating net worth.

For your convenience and the efficiency of the IU Angel Network operations, the membership agreement and annual dues payment are electronically processed via the IU Ventures website.  For new members, after the initial conversation with a member of our team, we will send you a link to the website to affirm accredited investor status, electronically sign the membership agreement and pay your membership dues.  For renewing members, we will send you a reminder before your 12 month anniversary with a link to the membership website.

IU Angel Network members will have the opportunity to invest in IU-affiliated startups. Companies must generally meet the following criteria to be presented to the membership:

• Have a founder or executive in the C-suite that is an IU alum, faculty, staff, student, or parent;
• Be raising seed or Series A equity capital of $300,000 to $3 million or syndicating later-stage equity financings with an existing institutional lead investor; and
• Be located in the United States.

The IU Angel Network connects its members to companies seeking capital, which may have the potential for high growth and significant financial returns. When filtering opportunities for review by IU Angel Network members, the IU Angel Network operating team generally looks for the following attributes:

• A large market opportunity;
• A unique value proposition;
• Proprietary technology, intellectual property, or other basis for sustained competitive advantages;
• A dedicated management team;
• A corporate structure that allows for equity investment at defined terms and conditions; and
• A strategy and plan that has the potential to produce venture grade returns.

The IU Angel Network’s operating team actively seeks input and feedback on members’ areas of interest and focuses its efforts on areas in which members have particular preferences. Due to the importance of angel and venture capital funding, as well as the expertise of current members and the operating team, the IU Angel Network currently expects more investment opportunities in information technology and life sciences relative to other industries.

The IU Angel Network operating team does not provide investment recommendations. All investment decisions are made by individual members and all investments are made directly by members to companies. The team itself and/or through third-parties operates an information sharing platform and process designed to enable informed decision making in a timely manner.

No. IU Angel Network members are not committing capital to a fund and are not required to invest in any deals. Individual members are free to either invest or not invest in any opportunity as they so choose. Although IU Ventures employees will not participate in investments presented to the IU Angel Network, the IU Philanthropic Venture Fund and other Indiana University affiliates may participate in such investments and in doing so may limit the availability and/or size of investment opportunities for IU Angel Network members or invest based on superior information or on alternative, and in some cases potentially more favorable, terms.

While there are no minimum annual investment amounts for IU Angel Network members, companies may set an investment minimum per Angel investor in their funding round (company minimums typically range from $10,000 – $25,000).  Although it is not required, we encourage individual members to invest in at least one IU Angel Network investment per year.

In addition to any monetary investment a member may make, members are expected to be active in the network and to be available for advice, guidance, and opinions to support investment decisions and to help companies in which they invest grow.  

Members are required to pay a $1,500 annual membership fee. This fee helps fund the operations of the IU Angel Network, which includes both administrative services and resources. The IU Angel Network’s Operating Team of professionals devote all or a portion of their time to delivering services to members, as well as the following resources:

• An online software platform that enables members to communicate and collaborate on diligence and investment decision making;
• A website that describes the network in detail for entrepreneurs and investors; and
• Pitch events made by relevant companies and networking events for members around the country and on campus.

Your annual membership fees will be due every 12 months on or before the anniversary of your IU Angel Network membership.  We will send you a reminder when it is time to renew your membership online. At the time of membership renewal we will also ask that you electronically reaffirm your accredited investor status.

No, the IU Angel Network does not collect ongoing management fees or transaction-based investment fees. All operations are funded by membership fees, IU Ventures (an affiliate of Indiana University), and donor support.  

Company Sourcing

• Actively seeking out investment opportunities that fit with member preferences.
• Developing early access to investment opportunities with companies where the IU Ventures leadership has previously developed a trusted relationship.
• Developing unique access to financings where entrepreneurs or other investors agree to reserve an allocation for the IU Angel Network.

Company Communication and Information Sharing

• Communicating throughout the process with applying companies.
• Gathering and packaging detailed information for each company for efficient consumption by members.

Company Screening

• Reviewing all companies, which often includes a company pitch/meeting.
• Filtering deals based on the strength of the business and the fit with member preferences.

Due Diligence

• Defining diligence requirements.
• Gathering additional information from companies.
• Performing independent research and analysis, and gathering insights from relevant experts.
• Compiling diligence results and summarizing findings, based on pre-defined diligence rubrics.

Company Services

• Monitoring and advising IU Angel Network membership invested companies throughout their life cycle.
• Connecting such companies with the broader resources of the global IU community, including faculty, students, alumni, and partners.

Member Recruitment

• Marketing to and communicating with prospective members.
• Managing the application process.

Event Management

• Planning, scheduling, and coordination of pitch events and networking events for IU Angel Network members.

The IU Angel Network and IU Ventures are not venture funds, investment banks, broker-dealers, investment clearinghouses, investment portals, investment advisors, tax, accounting or financial advisors, and The IU Angel Network and IU Ventures are not registered with the U.S. Securities and Exchange Commission, the Financial Industry Regulatory Authority, or any state securities commission. Rather, the IU Angel Network is a forum in which members may discuss various aspects of investment and business, as well as be introduced to companies for possible investment. The IU Angel Network and IU Ventures do not provide advice, recommendation, or any other indication of appropriateness or inappropriateness of a particular investment brought to the attention of the IU Angel Network. The IU Angel Network and IU Ventures do not endorse any investment opportunity, make no independent investigation to verify information provided by companies submitting to the IU Angel Network for presentation or otherwise, and make no representation or warranty regarding the same.

The IU Angel Network actively sources investment opportunities from existing members, the Operating Team, and the global IU community, as well as direct applications via the IU Angel Network website.

The IU Angel Network’s operating team screens investment opportunities based on the preferences of angel members and readiness for investment before presenting opportunities to members.

The operating team provides support throughout the investment process, including:

• Sourcing deal opportunities to supplement deal referrals from members;
• Screening initial company applications;
• Managing information dissemination between the companies and members
• Managing process and communications during diligence; and
• Performing diligence tasks and analysis as needed based on pre-defined diligence rubrics.

The team does not provide investment recommendations. All investment decisions are made by individual members and all investments are made directly from members to companies. The team operates a platform and process that enables informed decision making in a timely manner.

IU Angel Network members are expected to be active in the network. This includes actively sourcing investment opportunities for the group, collaborating and contributing to diligence processes and investment decisions, participating in the investment process on a regular basis, and providing support and guidance for companies in which they invest based on experience and expertise.

In addition to being shareholders in member invested companies, IU Angel Network’s members can provide support and guidance to such companies based on experience and expertise. This could include advice on business strategy and tactics, introductions to potential customers or partners, assistance with recruiting, and facilitation of future financing rounds or exits. When appropriate, members may be asked to serve on the board of directors of member invested companies. Members will not be required to serve on boards.

The operating team intends to be active in monitoring IU Angel Network member invested companies. It may also provide limited support to member invested companies, including advice on business strategy and tactics, introductions to potential customers or partners and assistance with recruiting.

The IU Ventures team screens about 10-15 companies per month (approximately 150 companies per year). We will target bringing 10-12 opportunities for investment in front of the membership each year.  We only invite companies to pitch that meet the program’s criteria, so this number may vary over time. We depend on our members to help introduce us to high-potential start-up companies that meet our investment criteria, so that we can help those companies with their growth goals and allow our members the opportunity to participate.

The IU Angel Network’s goal is to identify 10 – 12 investment opportunities annually.

• Members receive notice of an upcoming company presentation (pitch meeting) as well as access to the company’s data room on the IU Angel Network software platform.
• Member meeting where the company presents / pitches.
• Meetings are typically 60-90 minutes in length including networking, company pitch and Q&A
• Interested members express interest in making a potential investment to the Executive Director.
• Follow up questions are answered by the company for any outstanding questions asked by interested members.
• A deadline is set for members to finalize their investment interest and intended amount of investment (timeline is typically driven by the company’s close deadline).  The member informs the Executive Director of how they would like their investment to be made (i.e., investment amount, name and address to be shared with the company’s attorneys for legal document preparation).
• As members are investing directly in the company, the company’s closing attorney will coordinate with the member to sign investor documents, provide wire instructions for the investment, and to distribute completed documents from the transaction.
• At any time during the close process, please feel free to contact the company’s closing attorney or a member of the IU Angel Network team for assistance.
• It is vitally important that members sign and fund on a timely basis.  The IU Angel Network’s reputation in the investment and entrepreneurial community is derived in part on being a group of attentive and responsive investors.

In most deals the investment terms are set by the lead (or largest investor).  This usually is a venture capital fund or other type of institutional capital investment.  Sometimes a group of investors forms a syndicate which negotiates the term sheet with the company.

In addition to attending events in person, members can also watch company presentations live by joining our online videoconference or view a recorded version of the pitch if their schedule doesn’t allow for participation at the time of the meeting.

No. The IU Angel Network respects the privacy of members and will not publish a membership list. As companies enter the formal diligence process with the IU Angel Network, interested members will be introduced to the company. Background information can then be shared directly by members with companies.   

Companies typically provide their investors with quarterly updates.  In addition to these company updates, periodically and on an ad-hoc basis, the IU Angel Network may pass along pertinent information that becomes available to it.

Yes! Please feel free to review a copy of the IU Angel Network Membership Agreement here.

We would love to hear your feedback.  As we launch the network, we know there will be things we can improve upon.  We need and want to hear from you. Please reach out to any member of our team at any time with your feedback and suggestions.