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Seeking Funding FAQ

Q: What size investment will Twin Cities Angels consider?

Every situation is different but typically, $50,000 to $1 million range (including our side-by-side funds).

Q: How do I apply for consideration?

See application instructions under "Selection Process".

Q: How long does the screening process take?

It varies depending on where we are in our monthly review cycle when you first contact us. It also depends on our assessment of your plan and presentation and our screening committee's judgment on your state of "readiness". After screening, we invite the best 1 or 2 opportunities each month to present to the membership.

The fastest the cycle from receipt of your information to closing on an investment will be:

- Screening: 1 to 4 weeks - At the conclusion, a decision is made to invite the applicant to make a presentation, or a feedback about observations on the materials presented

- 1 week (at the most) to present to full membership (note: all materials must be received prior to the presentation)
- 5 weeks for due diligence
- 4 weeks to closing

Total 11 to 15 weeks.

Q: What kind of company is Twin Cities Angels looking for?

Generally, we are looking for fast growth in a well-defined space, a minimum $50 million business in 3-5 years, a plan to get there, opportunities that can return a 5-10x multiple to early stage investors.

Q: What industries does Twin Cities Angels focus on?

We focus upon industry in which we have expertise which covers a wide range, but the characteristics of large size/growth, proprietary industry changing technology and probability of a successful exit are common denominators.

Q: What geographic region will Twin Cities Angels consider?

Companies in the Twin Cities, greater Minnesota, western Wisconsin, Northern Iowa and eastern Dakotas. Generally, we will not consider companies based further than 300 miles from the Twin Cities.

Q: What is the average stage of the companies that present to the Twin Cities Angels?

The Twin Cities Angels likes technology companies with strong teams, promising technology, big potential markets, solid barriers to entry, and IPO or logical acquisition prospects. Since we like to be the first or early money into a deal, we recognize that for seed stage companies being certain that a company is all of these things may not be possible—that is what makes investing at this stage risky. However, the more a company is like this, the more likely it will succeed in raising money from the Twin Cities Angels.

Q: What categories of companies do you invest in?

In general, we invest in areas in which we have expertise. The Twin Cities Angels membership has expertise in a wide range of markets, technologies and functions. Consequently, we invest in many areas: from medical devices and retail to green technology and veterinary medicine, from semiconductor to biotech, from software to telecom.

Q: What kinds of companies are not successful in gaining the interest of the Twin Cities Angels?

In general, companies that are outside the upper Midwest area and those for which we have no expertise. There may be exceptions to this rule.

Q: How are deals selected for presentation?

The Twin Cities Angels receives 8 to 18 deals per month and enlists the members on a Screening committee plus attending individuals of the entire membership to select the top 1 or 2 to present at our dinner meetings.

Q: What are your criteria for making an investment?

While each deal is different, there are some basic requirements for submission to the Twin Cities Angels. Please see Investment Criteria for a list. You may also contact us at info@TCAngels.com with further questions.

Q: What does the Twin Cities Angels look for in their initial review?

As with most venture funds, the Twin Cities Angels seeks to invest in companies with a strong management team, unique technology and a large potential market.

Q: What should my executive summary or business plan contain?

Your plan needs to offer us enough information to determine the strength of your team, market and technology. Beyond that, we need to understand your business model and financial projections as well as your capital requirements, the milestones you will reach with this investment and how much you believe you will need to reach cash flow breakeven. Your executive summary should also include specific information on your customers and competition. However, it should be concise – ideally 1 to 3 pages. Companies that can accurately convey themselves within a one page narrative are much more likely to score well in the pre-screening process.

Q: Do you sign Non-Disclosure Agreements (NDAs) or Confidentiality Agreements (CDAs)?

Since we receive so many plans, our policy is not to sign NDAs or CDAs. The Twin Cities Angels prides itself on our practice of the highest respect and care of the confidentiality of all information received; aiming to treat you as we ourselves wish to be treated. However, you should not, under any circumstance, forward confidential or proprietary information to us.

Q: Are there any fees to submit to the Twin Cities Angels?

There are no fees to submit or present to the Twin Cities Angels. In fact, companies selected for presentation to the Twin Cities Angels receive several valuable things for free: speech coaching and document preparation, feedback from venture experts, and dinner.

Q: Does the Twin Cities Angels syndicate?

Twin Cities Angels may syndicate with other small VCs, other angel groups and other angels.

Q: How long does it take for a company to receive funding?

The Twin Cities Angels membership can act quickly – see typical investment timing. Occasionally, a syndicated deal will have another lead and a tight timeline. However, if the Twin Cities Angels is looked to as the only or “lead” on a financing, you should anticipate that it would take between 2-3 months for a deal to close.

Q: When should I expect to provide references and due diligence materials?

Once the dinner has concluded our members will vote to express their interest in your company. If the membership determines that it will move forward with the deal, Twin Cities Angels will schedule a follow up meeting with you and our due diligence team. At this stage you should be ready to provide our members with their requested materials and references.

Q: What are typical term expectations if an investment is made?

Every deal is unique and a simple answer on term expectations is generally not possible. The guiding principal on terms is that incentives of everyone be aligned. If a Venture Fund makes 10 investments and 9 of them fail and one achieves a 10 multiple on the investment, the Fund may just break even. Entrepreneurs must be motivated to make a hefty return for their investors. Likewise, the investors must ensure that entrepreneurs are consistently and substantially rewarded for their ongoing contributions and the risks that they undertake. With this guiding philosophy, the Twin Cities Angels negotiates in the best possible faith to get to terms that proportionally and appropriate incent all parties.

Q: How much money does the Twin Cities Angels typically invest in companies?

At this stage in our organization, there is no typical amount however the range is anticipated to be from $50,000 to $1 million before syndication.

Q: Does the TCAngels always take a board seat position with each investment?

Companies typically like to pitch to groups like the Twin Cities Angels as much to interest one of our members to join the board or become an advisor to the board, as to acquire seed capital. Most companies that receive funding from the Twin Cities Angels also receive at least one Twin Cities Angels' member as a board member or with formal visitation / observer rights to the Board.

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