These are some of the common questions we receive. Still have a question, let us know!
WHAT IS AN ANGEL INVESTOR?
Angel investors are Accredited Investors who invest in high-risk, early-stage ventures by reserving a small portion of their total investment portfolios to provide emerging companies with seed and startup capital through direct, private investments.
WHO IS AN ACCREDITED INVESTOR?
Accredited Investor is a term defined by the U.S. Securities and Exchange Commission. Many securities may only be offered to investors meeting the definition. This is intended to better protect people who do not have the income or net worth to absorb the inherent risks of investing in early-stage companies. There are many rules affecting private placements, and E8 must - and does - abide by them.
IS E8 AN ESTABLISHED ANGEL GROUP?
Yes, E8, established in 2006, is a Washington based non profit 501 (c)(6) made up of accredited investors. E8 is also a member in good standing of the Angel Capital Association. We follow a set of criteria in vetting and accepting our members which meets SEC guidelines, while protecting our investors’ privacy and without requiring full disclosure of their financial assets.
WHO ARE E8 MEMBERS AND HOW MANY ARE THERE?
Since our founding in 2006, we have had several hundred members who remain active as their professional lives and funding resources allow. Our current membership is 130+ members, concentrated primarily in the Pacific Northwest, but radiating out across North America, Europe and Asia.
Many are present and former high-tech and cleantech entrepreneurs and executives. Other members have deep experience in finance, environmental engineering, real estate development and the utility space.
WHERE AND HOW OFTEN DOES E8 MEET?
E8 meets about nine times each year to hear from pre-screened companies about their investment opportunities. Our member meetings are typically held virtually online. E8 also hosts in person social gatherings and special member-and-sponsor-only educational events.
HOW MANY NEW COMPANIES CAN I EXPECT TO SEE IF I JOIN E8?
Our screening committee currently approves between 25-30 new companies who present each year. In addition, E8 shares opportunities for follow on investment from our existing portfolio companies.
IS THERE A MINIMUM INVESTMENT REQUIREMENT?
No, but with a goal of making more impact, we encourage members to invest and to participate in at least one due diligence team per year.
WHAT IS THE RANGE OF MONETARY INVESTMENTS TYPICALLY MADE BY ANGELS?
The range varies widely, both by individual investment and by total portfolio size. Individually, E8 members typically invest $25,000 to $100,000 per deal. Some occasionally contribute more and on occasion we have opportunities with a lower minimum investment level.
WHAT IS COLLECTIVE DUE DILIGENCE?
Due diligence (DD) is the term used by investors to describe the process of deciding whether or not to invest in a particular opportunity. Collaborating on this process with other interested members is a significant benefit of joining E8. Not only does this reduce the cost and time burdens for each investor, the collective knowledge and expertise available increases effectiveness.
After a company presentation, interested members form an informal DD group and share the work involved. A more experienced investor volunteers as ‘deal lead’ to guide the members through a multi-week ‘discovery process’ to better understand the market and the company’s potential, and to act as liaison with the company.
E8 provides helpful due diligence checklists and other guidance.
Involvement in DD in no way obliges you to make an investment. Many of our members participate for the educational opportunity it provides.
WHAT IS A TERM SHEET?
A term sheet is a summary of all important aspects of a deal negotiated by potential investors and the company during the due diligence process. It is not legally binding. The terms become binding when translated by the company’s and/or investors’ attorneys into multiple documents at closing, they are signed by all parties, and money is exchanged by the angels for equity (or sometimes convertible debt and rarely straight debt) in the company.
In some cases, E8 negotiates the term sheet. In others, another angel or angel group or venture capitalist has already invested in the company. In those cases, a term sheet is in place before DD begins and the process focuses on whether E8 wants to conduct further research, or whether it represents a compelling investment.
WHAT IS THE LEGAL RELATIONSHIP BETWEEN E8 AND ITS MEMBERS?
E8 simply provides a forum for the matching of entrepreneurs of early stage companies with investors who are committed to funding high-risk opportunities.
E8 provides these benefits while maintaining the privacy of its members in accordance with the organization’s Confidentiality Policy. Please also read the Legal Disclaimer, which describes the legal relationship among E8 members and entrepreneurs or companies.
To a large degree, investors are the face of E8, and our members are expected to conduct themselves in a professional manner. E8 values diversity and inclusion and we are committed to a workplace and to hosted events that are free from harassment, disrespect, and divisiveness.
ARE THERE OPPORTUNITIES FOR MEMBERS TO GET MORE DEEPLY INVOLVED?
Yes. Members are encouraged to participate as much as their interest and time allows.
Participating in the monthly screening calls
Serving as a guide to familiarize the entrepreneur with E8's process
All aspects of Due Diligence, even if you do not intend to invest
Serving as a Deal Lead
Presenting in an educational event or workshop
Assisting with outreach and communication
Serving as a liaison to other angel groups, venture capital groups, and strategic partners
Representing E8 at conferences and tradeshows