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How to Choose an Angel Network
5 questions to streamline your decision
Should you join an angel network? And if so, which one?
Today, I’ll walk through 5 questions to help you decide.
The Observer Express
Don’t have time to read the entire post right now? No worries, here are the main points:
Joining an angel group provides access to deal flow, community, shared expertise, learning, and the opportunity for co-investment.
Five questions to ask oneself before selecting an angel group:
What’s your motivation?
What kind of deals do you want to see?
How much time do you want to spend?
What other features are important to you?
What’s your budget?
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Do I Need to Join an Angel Network?
Short answer? No.
Joining an angel network does not make one an angel investor - writing a check does. Depending on your preferences, risk tolerance, and objectives, you may be better off not joining a network at all. Syndicates. Venture capital funds. Deal flow platforms, incubators, accelerators, crowdfunding, the list goes on. There are tons of ways to access and invest in angel-stage deals.
However, in general, some of the benefits of joining an angel group include (but are not limited to) the following:
Access to Quality Deal Flow. Most angel groups have some process for sourcing and evaluating deals. Much more on that in the Angel Ops e-book.
Community & Networking. You’re not doing this on your own. You’ll still write your own checks, but you can do so alongside a group of like-minded peers.
Shared Expertise. Pool knowledge and experience with other investors - hear their perspectives and share your own.
Learning. Many angel groups offer educational content, training, and more.
Co-investment Opportunity. Being part of a group allows for greater bargaining power than a solo investor would normally have (all else being equal).
The tradeoff here is there’s typically a fee to be a part of these communities - more on that in a sec.
Ok, so you’ve decided you want to join a group - now what? How do you choose? (By the way, I’m assuming you’ll only join one group, though some investors opt to join more than one).
Pick Me
The first angel group launched in the mid-1990s (more history in this article), but there are now at least 400 in the US alone (and likely many more). So choosing the right one for you may not be a simple task.
Here are a few questions that might help:
1. What’s your motivation?
Be honest with yourself - what is the main reason you are joining a group?
Is it…
To network?
To learn?
To give back & get involved in supporting entrepreneurs?
To maximize returns with this (small!) slice of your investment portfolio?
For interesting conversation pieces over dinner?
All these motivations are well and good, but different groups will prioritize different things, so having a clear sense of what’s driving you will make the assessment process much clearer.
2. What kind of deals do you want to see?
The core function of an angel network is to close deals (more on that in this post). Over time groups will naturally optimize their focus around the types of deals their members invest in.
Are you looking for deal flow that is focused on a particular…
Region?
Stage?
Industry or sector?
Impact or social objective?
Business model?
Some groups are hyper-focused on one or more of these factors. Others are generalists. What’s important to you?
3. How much time do you want to spend?
We all get 24 hours a day, and different angel groups require varying levels of involvement. Some are more “passive” or “hands-off,” while others expect their members to be much more involved and “hands-on.”
How much time do you plan to spend…
On due diligence?
Traveling and attending events?
Sourcing deals?
Volunteering for other roles within the network?
4. What other features are important to you?
There are plenty of other features that some groups offer and others don’t. Here are some additional things to think about:
Location. In-person vs virtual vs hybrid events.
Size. Small tight-knit vs large diverse group.
Education. The breadth of training and member development resources.
Reputation. Brand strength and perception across the ecosystem.
Age. New or well-established group.
Volunteering. Limited opportunities vs significant reliance on volunteers.
Leadership. Led by other volunteers or by a professional, paid director.
Student engagement. Involvement of students or strict reliance on professionals.
5. What’s your budget?
Finally, we come to the budget. Like with any product, there are “value” angel groups and there are “premium” angel groups. The “bells and whistles” tend to increase as the price goes up.
The two factors that are most important when considering budget are:
What features are important to you (see previous questions)?
How much capital do you intend to deploy? I’ve generally seen angels spend no more than 5% or so of their expected annual investment on “overhead,” including membership dues. If you’re planning to invest $100,000 per year, for example, a budget of $3,000-$5,000 to be part of a great network would likely feel reasonable.
Here are 3 levels of angel network membership:
Value: $0-$1,499 / year Groups that charge fees in this range tend to offer a limited feature set with heavy volunteer reliance unless their membership is extremely large.
Midrange: $1,500 - $2,999 / yearGiven the larger budget, networks in this category can offer more support features and often have a small dedicated team.
Premium: $3,000+ / yearThese groups tend to offer top-of-the-line support, a solid team, and other bells and whistles.
Note: These price ranges and basic feature sets are generalizations and are purely based on my experience. I’m confident there are exceptions out there, so it’s important to perform your own analysis when making this decision.
Final Thoughts
Deciding which angel group is right for you is an important step and one that I encourage new angels to thoughtfully consider. There are tons of factors to weigh, but I’m confident asking the 5 questions I’ve listed today will make the process much clearer.
What Do You Think?
What factors are most important to you when considering an angel group? Why did you join the group(s) you are a part of?
*I include this section in every post because I’m genuinely curious to hear what you think. I answer every response, so please, don’t be shy!
Weekly Observations: 3 Lessons Learned
I gotta learn to sell the company, not just myself.🏢This week we kicked off a new project, and the customer seemed disappointed that I wasn’t personally the one who would be performing all the analysis. While I appreciate the trust and relationships I’ve gotten to build over the last few years, I’m realizing more and more how important it is for me to learn to sell the value of the company and our team, instead of MY value. Something I’ll be working on more intentionally over the next few months.
Defining what problem we’re NOT solving is just as important as defining which one we ARE solving.🚫✅Startup 101 is to know and clearly define the problem you’re solving for a customer. But I’ve recently been learning that clearly identifying what problems we are NOT solving for them may even be more important. If we try to do everything we’ll accomplish nothing, but if we do one thing extremely well, we might actually have a shot at getting it done.
Turn up the volume.🔊I have been tasked with what feels like a very aggressive goal of growing our subscriber base to 500 by 10/1. We’re launching a few initiatives to help get there, and one of those is an evolution from 1-2 social posts per week to about 20 across both LinkedIn and X / Twitter. Let me tell you, managing 20 posts per week is a very different experience from managing 1! But I’ve already learned a ton and am excited about this new rhythm.
Weekly Links: 3 Things I Found Interesting
Thanks for reading, have a great week.
-Andrew
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The Angel Ops E-Book
Are you a member or leader of an angel network? Level up your angel group’s processes for free by checking out Angel Ops: The 5-Step Framework for World-Class Angel Network Deal Management today.
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About Me
I cultivate flourishing.
I'm also the CEO of PitchFact, where our mission is to cultivate flourishing specifically through efficient and collaborative early-stage diligence. I'm a proud husband, grateful father, and honest friend. My love languages include brisket, bourbon, and espresso.