The first step is to select from the membership options (under the Membership menu) and pay your first-year member dues. Be sure to check each membership option for the eligibility requirements. After paying dues you'll automatically be directed to the member onboarding page to get you set up and ready to invest (Full Members) or participate in educational opportunities (Associate Members). With membership in Wharton Alumni Angels you also automatically get free membership to the Angel Capital Association.
You can access the deal flow management platform via the Member Portal. We use a member-only, online tool for managing our deal funnel and pre-investment workflow. Most members will have view-only rights for deals. Other members (such as screening committee members and admins) have expanded user rights.
Go to the events menu and select upcoming events. Pitch events are member-only and you must be logged into our website to see pitch events on the calendar. When you are not logged in you can only see events open to non-members.
This is a multi-part question.
- Each company we seek to invest in may set their own minimum check size. Wharton Alumni Angels syndicate all of our members' investments in a company into an SPV and we then write one check to the company. If our aggregate investment from all interested members is below a company's minimum we may not be able to invest.
- For any single investment in a company, a member's minimum check size is $5,000 USD or equivalent.
- Per the member agreement, we expect our Full Members to invest $20,000 USD per year on average. In years when a Full member cannot do so, we ask that members contribute time to volunteer by supporting the deal process.
- Investors also share the expenses of servicing the SPV. See the separate question regarding SPV expenses.
One of the investors in the deal will serve as the 'Deal Lead'. This person is a single point of contact for the entrepreneur. The regional Managing Director and the Club President should be informed periodically on the proposed deal terms in case there are terms that won’t work for our structure or may otherwise adversely compromise our position in the deal.
If none of the deal investors feel experienced enough to negotiate deal terms, one of our leadership team members or an experienced member will help, but we would like an investor in the deal to act as the Deal Lead.
We prefer to only invest in deals when we have Financial Information Rights and Pro Rata rights in follow-on financings. We have a standard side letter for those and other deal terms if needed.
As a policy, Wharton Alumni Angels does not participate in Rule 506(c) offerings or invest in 'pass-through' operating companies such as sole proprietorships, partnerships, S-corporations, and LLCs. Ask our leadership team for support if these are unfamiliar to you.
Full Members who are investing in the deal are in charge of performing due diligence. We can support the investors as needed based on their experience. Some information will be provided by the companies. Companies may have an online Data Room, but most early-stage companies will not. We typically store any information from the company or from other sources on the deal management platform. If investors wish to conduct other research on the market, technology or industry that is the responsibility of the investors in the deal. We have members who are experts in many fields, and investors can ask each other for support. If investors need guidance on deal terms, investor rights, or similar, we do have access to legal counsel when it is warranted. For the vast majority of deals, the terms are straight forward, and questions can be answered by experienced members.
We invest via a suitable Special-Purpose-Vehicle (SPV) usually a Delaware LLC. The Operating Agreements and Subscription Agreements are available on the member portal.
SPV expenses are paid by investors. For each investment the SPV collects an expense allocation from members to cover costs of the LLC (e.g., set-up, accounting, tax preparation, government tax or fees). There is an annual cap on these fees, thus the more our members invest the lower the expenses are as a percentage of invested capital.
Full Members contribute to expenses only when they invest. When they do not make a new investment there are no recurring fees.
Wharton Alumni Angels only collects expenses for actual expenses. Wharton Alumni Angels does not charge a management fee and does not collect carried interest.
Each deal security type is unique and may be different from others. We've invested using Convertible Notes, SAFEs, Preferred Stock, and Debt with Warrant Coverage. Common stock deals are unusual.
As a policy, Wharton Alumni Angels does not participate in Rule 506(c) offerings, nor pass-through operating companies such as sole proprietorships, partnerships, S-corporations, and LLCs.
Once a Full Member knows that they are considering an investment in a deal they should indicate their consideration by using the deal consideration tool on the Member Portal. In case the deal is oversubscribed, this submission through the Member Portal is used to allocate investment rights to members on a 'First Come First Serve' basis. You can also indicate whether you'd consider being the Deal Lead on. the form
Investors who are participating in the deal are responsible for the level of due diligence that they feel is appropriate (see separate Due Diligence question in the FAQ)
Investing FUll Members will receive the deal document such as purchase agreement from the company and should review that carefully. Our leadership team is available to support and answer questions. When an entrepreneur does not have any deal documents and no other investors, we can propose a deal structure that best suits the deal. Investors must ensure that all documents are suitable for their local jurisdiction.
Investment documents vary deal by deal. The definitive deal documents with the company will be signed by Wharton Alumni Angels when investing via the SPV. In all deals, investors should also carefully review the definitive documents.
We do often invite other angel networks or VC firms to invest in companies we are in contact with but, in doing so, we follow normal prudence and business etiquette. Before sharing any deal with others we obtain permission from the entrepreneur to share the deal as well as permission regarding which information we may share. Before sharing with other investors we make the investment fully available to Wharton Alumni Angels investors first, including in other regions around the world. Before sharing, we also make sure the entrepreneur commits to an allocation in the deal for our investors so that our investors are not excluded from the deal. Making a “backroom” deal that results in excluding other Wharton Alumni Angels members from the deal is prohibited by our Member Agreement and may result in loss of membership.
Investors have access to our SPV LP Portal. All financial information about an investor's deals, cost basis, current valuation, and other metrics and data are available via the LP portal.
We have designated members who act as Portfolio Managers. These Portfolio Managers, along with the Deal Leads continue to track the progress of portfolio companies and follow up with companies at least once per quarter. When we have information rights we follow up with the company to ensure they send financial reports, business reports and etc. We always communicate to the company that we want to be informed of follow on financing, even when we have pro rata rights.
Wharton Alumni Angels holds regular educational events around the world. Check the calendar for events near you.
By virtue of being a member of Wharton Alumni Angels, you are a member of Angel Capital Association. You can create an account and access all ACA training material and webinars for free.
Nothing beats hands-on experience! The best way to learn is to volunteer to screen deals, prepare investment memos, review deal docs, and become a Deal Lead. If you want to get involved we have friendly, experienced members who are willing to guide you through the process. nothing beats hands-on experience.