Organized angel groups, such as Oklahoma's SeedStep Angels, offer unique benefits to angel investors — those wealthy individuals who make equity investments in entrepreneurial companies.
Angel groups provide a structured, professional association for like-minded people who have an appetite and the money to invest in entrepreneurial companies.
In other words, organized angels, such as those in SeedStep Angels, enjoy working together to find great deals and achieve above-average financial returns.
So what does it take to become a SeedStep Angels member?
Angel investors must satisfy the Securities and Exchange Commission definition of “accredited investor.” This requires that an individual have a net worth or a joint net worth with a spouse of $1 million (excluding personal residence) or individual income that exceeds $200,000 or joint income with a spouse exceeding $300,000.
Once the accredited investor threshold is met, the individual must be willing and able to invest a portion (often in the 5 to 10 percent range) of his or her total portfolio, knowing that those funds likely won't be accessible for at least five years.
In early-stage investing, losers happen fairly quickly; winners take a while.
On average, about three in 10 deals in this asset class make returns. About three in 10 fail, and the rest fall somewhere in between. A study by the Angel Resource Institute (ARI) of returns on 3,097 angel investments reported that 61 percent had positive returns on their investment while the rest lost money.
This is the second in a four-part informational series on angel investing in Oklahoma.