Pinned 5 years ago

   

In today’s business world, the entrepreneurial startup zone is where all the creative action is. The emergence of Angel investment funds has powered startups in all sectors. How is an Angel Investment Fund different to a PE fund? Angel investment funds are like any other small private equity (PE) fund, but they focus on seed or very early stage of a startup’s life cycle. At this stage, the startup needs small amounts of funding. But the funding can be both high risk and high returns. Most angel funds are limited partnerships with the Fund Manager as the general partner and other investors as limited partners. What is the role of a Fund Manager? The Fund Manager has comprehensive responsibility for the fund and its performance. He or she raises the money from the angels who are participating in the fund. The Fund Manager, in the role of the general partner, then scans the market to identify smart investment opportunities; conducts due diligence of the target entity; invests money from the angel fund; and collaborates with the portfolio companies to ensure business performance and results. The Fund Manager ensures a multi-fold valuation and subsequent exit to ensure high returns on the equity invested Fees Angel funds, like any other organized venture funds, make multiple investments to hedge risks. These funds are represented by professional managers or by entrepreneurs themselves who possess experience and expertise in creating and scaling startups. An Angel Fund earns a management fee and an incentive fee. The management fee varies between 1% and 3.5%. An incentive fee is a performance linked success fee and may climb to 20%. The success fee is paid as a percentage of the profit accrued on exit. In the absence of profit, there is no success fee. Focus Angel funds evolve to have their respective focus. Technology companies have shown to be a preferred segment with angel funds. Fintech, Medtech, Edtech, Cybertech, Cleantech, etc are examples of areas that have grown quite large. Lately, we are seeing the emergence of People Tech as an underserved but very lucrative sector for investment. This originated from the need to scale the organizational demands of people in a cloud era. Employee experience and a consumer mindset are leading to a very different set of expectations from employees which is making talent attraction and retention challenges. The HR tech market grew by an astounding 10 percent last year, according to Sierra-Cedar’s 2018–2019 Systems Survey. The arrival of innovative, creative and predictive AI-based products is contributing to this explosion. The London based HRTP (HR Tech Partnership) is an investment venture in the Human Capital space with most of its investors being senior corporate directors. The company is a growth stage investor and focuses on companies which leverage data and analytics to help organizations around Talent and Workplace productivity. It believes that advancements in the latest technology can be useful for disrupting conventional people practices and enhancing productivity. To know more about Angel Investment and how the HR TECH Partnership works visit www.hrtechpartnership.com

In today’s business world, the entrepreneurial startup zone is where all the creative action is. The emergence of Angel investment funds has powered startups in all sectors.

How is an Angel Investment Fund different to a PE fund?

Angel investment funds are like any other small private equity (PE) fund, but they focus on seed or very early stage of a startup’s life cycle. At this stage, the startup needs small amounts of funding. But the funding can be both high risk and high returns. Most angel funds are limited partnerships with the Fund Manager as the general partner and other investors as limited partners.

What is the role of a Fund Manager?

The Fund Manager has comprehensive responsibility for the fund and its performance. He or she raises the money from the angels who are participating in the fund. The Fund Manager, in the role of the general partner, then scans the market to identify smart investment opportunities; conducts due diligence of the target entity; invests money from the angel fund; and collaborates with the portfolio companies to ensure business performance and results. The Fund Manager ensures a multi-fold valuation and subsequent exit to ensure high returns on the equity invested

Fees

Angel funds, like any other organized venture funds, make multiple investments to hedge risks. These funds are represented by professional managers or by entrepreneurs themselves who possess experience and expertise in creating and scaling startups. An Angel Fund earns a management fee and an incentive fee. The management fee varies between 1% and 3.5%. An incentive fee is a performance linked success fee and may climb to 20%. The success fee is paid as a percentage of the profit accrued on exit. In the absence of profit, there is no success fee.

Focus

Angel funds evolve to have their respective focus. Technology companies have shown to be a preferred segment with angel funds. Fintech, Medtech, Edtech, Cybertech, Cleantech, etc are examples of areas that have grown quite large. Lately, we are seeing the emergence of People Tech as an underserved but very lucrative sector for investment. This originated from the need to scale the organizational demands of people in a cloud era. Employee experience and a consumer mindset are leading to a very different set of expectations from employees which is making talent attraction and retention challenges. The HR tech market grew by an astounding 10 percent last year, according to Sierra-Cedar’s 2018–2019 Systems Survey. The arrival of innovative, creative and predictive AI-based products is contributing to this explosion.

The London based HRTP (HR Tech Partnership) is an investment venture in the Human Capital space with most of its investors being senior corporate directors. The company is a growth stage investor and focuses on companies which leverage data and analytics to help organizations around Talent and Workplace productivity. It believes that advancements in the latest technology can be useful for disrupting conventional people practices and enhancing productivity.

To know more about Angel Investment and how the HR TECH Partnership works visit www.hrtechpartnership.com

Scroll to Top