Smart investments create smarter entrepreneurs, which create economic impact for our region.
Grand Angels investments fuel the entrepreneurial ecosystem of innovative companies throughout the Michigan region. We are looking to invest between $250K to $1M in early-stage companies through either of our two investment opportunities:
Grand Angel Investments
Grand Angels is a traditional angel organization, pairing individual investment opportunities with shared resources. Each accredited, GA member investor makes his or her own investment into a startup company, with due diligence shared among the members and decisions agreed upon within the context of the group.
Because of our commitment to growing strong entrepreneurs and their companies in our region, we are seeking to invest in Michigan-based and Midwest companies.
Grand Angels Venture Fund
Grand Angels Venture Fund is a committed capital fund, created by legacy members involved in Grand Angels’ investment group who sought a traditional venture fund and to diversify risk.
Grand Angels Venture Fund will invest in 12-15 companies during the next few years, and provide follow-on investments for portfolio companies. Its focus is in B2B technology, advanced manufacturing, advanced agriculture technology and life sciences companies that are currently generating revenues, or are pre-revenue with a clear path to exit.
Since forming in 2015, the fund has closed thirteen deals.
Can angel or venture capital help your business grow?* Before you submit an application to Grand Angels, consider the following:
- Is your organization located in Michigan or the Midwest?
- Are you seeking an investment between $250K and $1M?
- Do you have a business plan and a marketing plan?
- Is your business desirable, viable and feasible?
*Please note, Grand Angels is looking for early-stage companies. We typically focus on technology and life sciences and will not invest in “lifestyle” businesses or consumer products.
Get Funded FAQ
What is an angel network?
An angel is a high net-worth individual who invests his or her own money in start-up companies in exchange for an equity share of the businesses. An angel network is a group of angels who are aligning their capital to make larger investments—sharing research on companies, but investing individually.
Grand Angels consists of 44 active, accredited investors (who meet requirements of the Securities and Exchange Commission), who can add value to the company through high quality financial, intellectual and social capital.
What motivates the Grand Angels?
Many of the Grand Angels are former entrepreneurs themselves, who are making investments in order to gain a return on their money, to participate in the entrepreneurial process, and often to give back to their communities by catalyzing economic growth.
What is a venture capital fund?
Venture capital funds are investment funds that manage the money of investors who seek private equity stakes in startup and small- to medium-sized enterprises with strong growth potential. These investments are generally characterized as high-risk/high-return opportunities.
How do angel investors help small businesses?
In addition to financial capital, top angels mentor and coach their portfolio companies, often leading to more healthy growth. They introduce entrepreneurs to potential customers and investors, see around potential problem areas, and help the start-up firms gain credibility in their fields.
What is the difference between Grand Angels and Grand Angels Venture Fund?
Both angel groups and venture capital funds invest in entrepreneurial firms and take equity (ownership) in those businesses. The difference is how the financial capital is deployed.
Angel Networks share research, due diligence and coordinate investment activity, but invest individually.
Venture capital groups assign a fund management team to conduct research and due diligence and invest committed capital into startups and small businesses.
While traditional venture capital funds invest funds from numerous sources, Grand Angels Venture Fund consists of pooled capital from the Grand Angel Network.
Unique to Grand Angels, the due diligence and research findings of Grand Angels Venture Fund is also shared across the Grand Angels Network for members to make their own co-investment decisions.
In what kind of companies does Grand Angels invest?
Grand Angels’ investment focus is in B2B technology, advanced manufacturing, advanced agriculture technology and life sciences companies that are currently generating revenues, or are pre-revenue with a clear path to exit.
How do I know if my business is right for Grand Angels investment?
Angel or VC investment is the right source of funding for only a small proportion of entrepreneurial businesses. When considering yourself for investment by an individual angel or angel group, ask yourself these key questions:
- Am I willing to give up some amount of ownership and control of my company?
- Can I demonstrate that my company is likely to realize significant revenues and earnings in the next 3-7 years?
- Can I demonstrate that my company will produce a significant return for investors?
- Am I willing take the advice from investors and accept board of director decisions I may not always agree with?
- Do I have an exit plan for the company that may mean I’m not involved in 3-7 years?
How do entrepreneurs protect their confidentiality?
All Grand Angels members have signed a non-disclosure agreement that keeps research, due diligence and intellectual property contained within the network.
When submitting executive summaries and even business plans to Grand Angels, please explain the business with enough information so that we can understand the company’s opportunity for success, but don’t learn about any confidential issues.
Grand Angels is most interested in the business behind the technology or idea. We don’t invest in the inventions, but in the business models and management teams that will grow the companies. If you have intellectual property that has not been patented, and you are uncomfortable sharing the IP it is best not to disclose it during the first part of the investment process. The organization’s blanket non-disclosure agreement with members is intended to protect and contain all of your IP.
When should I approach Grand Angels?
The best time to seek angel funding is when:
- Your product is developed or near completion.
- You have existing customers or potential customers who will confirm they will buy from you.
- You’ve invested your own dollars and exhausted other alternatives, including friends and family.
- You can demonstrate that the business is likely to grow rapidly and reach positive cash flow in 3-7 years
- Your business plan is in top shape.
What criteria does Grand Angels use to select entrepreneurs?
Grand Angels expect to at least see the following:
- A strong management team with experience and proven skills
- Companies operating in B2B technology, advanced manufacturing, advanced agriculture technology and life sciences industries
- Unique product or service distinguished by an identified competitive advantage and large market
- Personal financial investment in the company and investments from friends and/or family
- A clear picture of the market for your product or service and realistic plan for market penetration
- An exit strategy for the investor that is reachable within 5 to 7 years
- The potential for a strong return on investment
What process can I expect if I apply to Grand Angels for funding?
The Grand Angels path to investment consists of several steps:
- Application Begin by completing the application process online
- Pre-Screening When Grand Angels receives a completed application our staff will review it to quickl determine if it meets our general requirements. The pre-screening will eliminate applications that are incomplete, don’t meet the Grand Angels’ minimum requirements, or does not comply with the investing preferences of the organization. Expect at least one or two weeks for the pre-screening process.
- Screening Once an application has been accepted for review, a group of angels review and further define the opportunity. If the application passes muster at this stage, the angels will create a due diligence committee to lead further investigation into the business. It is at this stage that you will be asked to provide additional information, including a full business plan. Approximately 10 to 25 percent of all entrepreneurs who apply reach this stage. Screening is usually completed within another one to three weeks.
- Investment Meeting Entrepreneurs are invited to make his or her pitch at a meeting of all members of the angel organization. A question-and-answer session follows the founder’s presentation. Members discuss key issues about the company and determine initial interest in making individual or group investments after the entrepreneur leaves the meeting. Such investment meetings are usually held every month or two.
- Due Diligence A team of members interested in investing and specialists with knowledge of the industry under consideration conduct a thorough check on the entrepreneur, the business and the marketplace. The objective is to validate the business plan, including the management team, market opportunity and amount of funding required, and to negotiate a term sheet, thus placing a value on the investment. A further cut is made: 25 to 50 percent of the companies that reach this stage are actually funded, and the process can continue for two weeks to several months.
- Term Sheet If Grand Angels chooses to invest in your company, they will negotiate with you a term sheet, a document that guides lawyers in preparing investment agreements and which determines the relationship between the company and investors.
What questions will Grand Angels ask me during the investment process?
Grand Angels will focus their interest around your business, the market in which you are operating and you as the founder and entrepreneur. Generally these include:
- What does your company do?
- What is unique about your company?
- What problem does it solve?
- How big is the market opportunity?
- Why are you the best person to move this idea forward?
- Who are the key members of your team?
- What experience do you have?
- What motivates you to be in this business/industry?
- What is your plan to scale in the next 6mos, year, five years?
- What is your competition?
- What advantages do you have?
- What advantages do your competitors have?
- How are you, or how will you acquire customers?
- What is the typical sales cycle?
- What are your legal or regulatory risks?
- What intellectual property do you own?
- How was your intellectual property developed?
- What are your three-year financial projections?
- What is the planned use of Grand Angels investment?
What are Grand Angels’ standard term sheets?
Grand Angels standard term sheet can be found here.<link>TODO
This is customized depending on the funding arrangement negotiated between Grand Angels and the business owners.