The Impact Angel Group manages an annual fund to invest contributions from its investor members. After one year of membership, Impact Angel Group members are required to contribute $10,000 to each annual fund.
The structure and focus of the annual fund may vary from year to year, but the following is the structure and focus for the Impact Angel Group 2014 fund (the “Fund”):
The Impact Angel Group 2014 Fund, LLC
What is the focus of the Fund?
The Fund will invest in early stage Colorado-based companies with the potential to make a significant financial return in order to create a positive impact on our local economy and entrepreneurial ecosystem.
What is our criteria for the social and environmental impact of our investments?
The Fund will employ the Impact Angel Group’s definition of impact. We will have a preference to invest in companies with business models that will make a significant social and environmental impact, but we will not forgo our investment pacing and financial return standards to do so. A failed attempt to achieve a positive financial return on Colorado’s first impact angel investment fund could have very negative consequences, so we will weigh our impact and return goals very carefully.
Why do we raise an annual fund?
There are several reasons, but primarily, the Fund enables the Impact Angel Group to attract and maintain quality deal flow, and helps its members and principles be more efficient and effective angel investors.
What are the benefits of contributing to the fund?
The key benefits of the Fund include:
- Diversification. Since many companies require a minimum investment of at least $25,000, the Fund enables Impact Angel Group members to invest in multiple companies for less than what is often required to invest in one company.
- Deal Flow. We encourage participating investors to invest alongside the Fund. With this, active investors will be able to take advantage of the Fund’s deal sourcing and vetting process, but will also be able to invest additional capital as sidecar investors. No fees will be charged for sidecar investments.
- Support for the Impact Angel Group. This Fund will help to assure the financial sustainability of the Impact Angel Group and enable the Impact Angel Group to recruit and maintain talent to manage the organization.
Who screens the investment opportunities?
Elizabeth Kraus, the Impact Angel Group managing director, and Sheila Lamont, deal flow manager, will source and screen potential investments before presenting the opportunities for a vote by the investment committee.
How are investment decisions made?
Investments decisions are made by majority vote of an investment committee. The investment committee will initially consist of the Impact Angel Group managing director, Elizabeth Kraus, the deal flow manager, Sheila Lamont, and Impact Angel Group member, Steve Szapor. (Operating Agreement of the Impact Angel Group 2014 Fund)
How many investments will the fund make?
The number of investments made will depend on the amount of capital that Impact Angel Group members contribute to the fund, as well as the quality of the opportunities the Fund reviews. A minimum of $50,000 is required for the Fund close (which is already committed) and the Fund will make at least two investments in 2014.
Will the Impact Angel Group provide other investment structures (special purpose LLCs) for individual investment opportunities? The annual fund will be the only investment vehicle created by the organization for individual investment opportunities. Rare exceptions may be made for certain opportunities such as investments into other funds and syndicates via AngelList.
What is the cost structure of the fund?
A one-time $250 fee is required to join each annual fund and there is a 20% carry charge. (20% of the profits as defined in section 5.2(b) of the Operating Agreement of the Impact Angel Group 2014 Fund)
If I make other investments as an Impact Angel Group member outside of the Fund, will I be subject to the carry fee?
No. The carry fees will only be charged on the capital contributed directly to the Fund.
Over what period of time will the fund make investments?
The annual fund structure is intended to act as a vehicle to make investments during each calendar year. The Fund aspires to make all of its initial investments before December 31 during the year (2014) in which the Fund is formed. The Fund terms do allow 18 months from inception in order to make investments (in order to provide the full opportunity to assess deal flow presented during its first year) and it also has the ability to make follow-on investments if necessary. However, to reiterate, the intention is to invest all capital during the calendar year.
Will the fund manager have skin in the game?
Yes, the Fund manager (Elizabeth Kraus) has already committed $20,000 to the fund and may increase her commitment throughout the year.
Will the Impact Angel Group members be able to influence the investment activities of the Fund?
The Impact Angel Group values the opinions and expertise of its members very strongly. Each of the opportunities in consideration by the Fund will be presented to the Impact Angel Group members prior to the Fund’s investment. Member feedback will be welcome and very seriously considered.
What is the minimum and maximum investment required to join the Fund?
The Fund has a $10,000 minimum and a $1,000,000 maximum investment requirement.
For more details, please review the Operating Agreement of the Impact Angel Group 2014 Fund or contact us.