INVESTMENT PROCESS
NYA’s Investment Process, Key Considerations for Investments & FAQS
Although the funding cycle varies, commitment and closing typically occur within 2-3 months of NYA’s monthly Screening event. Applications submitted prior to the deadline are reviewed by Pre-Screening and Screening committees, then by all members. with founders sponsored by a NYA member given priority.
Read on for more details on the investment process, considerations for investments and FAQs from entrepreneurs.
Like many other angel groups, NYA uses a platform called Gust, which helps entrepreneurs start, run, and fundraise for their companies. All potential applicants must submit an application for funding using Gust.
Successful applicants will be invited to our monthly Screening. Each company will have 10 minutes to present, followed by 5 minutes for Q&A.
If sufficient members are interested after the Screening presentation, a 2-hour Discovery discussion meeting will be scheduled for a deep dive into the business, market and financials.
Term Sheet Negotiation occurs once Due Diligence is complete. Interested Angel investors will either present a term sheet that defines the structure of a proposed investment or respond to the term sheet already provided by the lead investor in a given round.
If there is further interest, NYA will schedule Due Diligence sessions, which can include verifying statements in the business plan and financial projections, conducting calls with customers and vendors, and discussing valuation to ensure both parties are within working distance. Founders who actively facilitate this process can help expedite a final investment decision, with a comprehensive Data Room being particularly useful.
COMMITTMENT & CLOSING
Since each NYA member invests individually making their own angel investing decisions, the size of NYA's interest in any deal depends on how many NYA members participate. An investment from New York Angels can be vary between $100k and $1.5M, with the median investment being around $500k.
If there is significant investment interest, New York Angels can lead funding rounds, using our own deal documents. In these cases, even if we are not the lead investor, NYA has an investment fund which may be able to add to the dollars invested by our individual members.
INVESTMENT CONSIDERATIONS
Management Team
We look for teams who are passionate, driven, and coachable. Teams must be ready to work with advisors and/or a Board of Directors.
Target Customer
The company has clearly identified the market segment and has proven there is a demonstrable and significant demand for the proposed solution.
Market Size
The projected spending in the product category is large and growing.
Competition
Your potential competitors are identified, and there is an understanding of the company’s differentiation points. True barriers to entry can help the company to maintain a competitive advantage.
Technology
The concept behind the product or technology has been proven through traction or by objective experts. A comprehensive business plan has been developed to commercialize the technology.
Protected IP
Your intellectual property is protected and an exhaustive search has been performed to ensure no patents or trademarks, held by others, are infringed upon.
Sales Strategy
You have a plan to achieve widespread market penetration for the products and services. Determine if an internal direct sales team will be created or if external channel partners will be used.
Profit Potential
You can demonstrate how high gross margins and consistent cash flow growth will be achieved.
Capital Needs
You have identified use of funds raised and how they will incrementally grow the business. You know how much capital will be needed to breakeven.
Financials
You have developed reasonable financial projections - including an income statement, cash flow and balance sheet and supporting spreadsheets - based on logical and realistic assumptions.
Exit Strategy
You have a clear exit strategy that will enable Angel investors to generate a return of at least ten times their initial investment.
Business Plan
You have developed a comprehensive business plan that articulates the key assumptions and strategies for how the venture will grow.
FAQS
Answers to the most commonly asked questions by entrepreneurs.
What if my round is nearing completion?
If you have a signed term sheet and your round is closing soon, it is possible to submit your application for funding as a flash deal. You must have at least one New York Angel member committed to invest and a signed term sheet with a lead investor. In the case of a flash deal, entrepreneurs can get funded in under one month.
Does it help if I know a member?
Yes, working with an NYA member who can provide feedback about your company and guidance regarding the NYA process will likely help your application. If a member of NYA is willing to provide a referral, please include that information on your application.
How long will it take to get funding from the New York Angels?
The average time from application to funding for NYA deals is about 2-3 months. However, some deals close in a month and a few take over 3 months. Founders can expedite the deal process by preparing due diligence information ahead of time, making themselves available for meetings, and generally being as responsive as possible.
Are there fees involved in submitting to the New York Angels?
No.
Do the New York Angels syndicate deals with other angel groups?
Yes, New York Angels has relationships with other angel groups in the Northeast and often syndicates deals when it makes sense. The entrepreneur always has the final say on where their business and material is presented.