Band of Angels

When seeking angel or seed funding, it is often better to raise capital from angel groups with significant experience. Band of Angels, known as Silicon Valley’s oldest angel group started in 1994, is one such group. The group promotes itself as approximately 150 high end and experienced executives who spend their time searching for lucrative business deals with high quality startups. The Band of Angels claim to have provided seed financing to over 200 startups that have had 50 profitable M&A exits and nine IPOs.

Members of the Band of Angels have been founders or co-founders of Symantec, Logitech and National Semiconductor along with executives at Sun Microsystems, HP and Intuit. It is an accomplished group of individuals to say the least.

The Band invests in technology startups that have strong teams and which target big markets and are located in Central California and Northern California only. Typically, members of the Band collectively invest $300,000 to $750,000 in a startup and each member of the Band makes its own investment decision. That is, the 150 members of the Band are individual investors. According to the Band, the largest investment made by its members is $3.3 million. The Band also has a small seed fund called the Acorn Fund that invests in startups with potential exits up to $20,000,000.

The Process
Business plans submitted for review (https://bandangels.com/entrepreneurs/submitform.php) are prescreened by a committee comprised of Band members with expertise in relevant technology sectors. Most plans do not pass this stage. The committee reviews 50 plans each month and selects six for invitation to the Band’s Deal Screening Committee that is held the last Wednesday of each month. In that meeting, chosen Band members will pose questions to the entrepreneurs of the six startups.

After that process, the Committee cuts two startups and asks the remaining three and a runner up to pitch their business in the form of a professional presentation at the monthly Band dinner meeting with approximately 40 Band members. In the two weeks preceding the selection and presentation process, the Band will provide training services to the startup and their representatives so that they can improve their chances to make a good impression on Band members. This includes improving their oral and written business pitches before the dinner. At the dinner, each startup will be given 10 minutes to present their ideas which will be followed by a five minute question and answer session.

After a dinner, presenting startups schedule meetings with interested members of the Band. The onus is on the startups to push the members to invest. We have heard that the persistent startups are the ones that succeed in raising money from Band members. According to the Band, the members reviewed more than 700 startups and made investments in only 13 in 2012 (1.9%). In other words, the odds of funding are not high.

Unlike some angel groups, such as the Keiretsu Forum, the Band of Angels does not charge its startups a fee to apply.