Have you read The road to liquidity and how COREangels changes the game (Part I)? If you haven't, take a quick look at it and come back here for some more juicy information about us.
COREangels International has the mission to support local leaders with local funds, with legal and financial framework to be able to help start-ups get established and grow by connecting them to the right partners, mentoring them, bringing new perspectives to the challenges that founders face along the way.
What is super important to comprehend is that building a start-up is not linear, and angel investors should know that the most important thing about this process is sharing experiences and learning from Founders and other investors.
In 2019 COREangels International was created with the idea of promoting new angels. We believe that angel investment is about learning, participating, and getting exposed to new situations from which we can learn. And our Intramarket can provide Angel investors with a new way of investing. Let's start with how we form Angel funds.
In COREangels we have different business angel funds all across the globe, and every angel fund has a leader or two. Leaders provide guidance and expertise to the rest of the angels in the group and help them navigate new waters alongside start-ups.
Each fund has a very diverse and mixed group of angels. And this is beneficial for all the angels in the group because each angel comes from a different background, some of the angels in the group have a lot of experience, and some of them are first-time angels. But, regardless if you have or don't have experience, this model runs democratically, decisions are made and discussed as a group, and everybody shares responsibility.So, being part of one of the funds means that you will learn by doing, and you invest not only in start-ups but in experience as well. In this stage, the most important aspect is building the group and raising funds as well as building the portfolio.
As soon as there are enough angel investors joining the fund the next step is building the portfolio of start-ups and growing it over time. Angels review and hear pitches of different start-ups. As mentioned before, the start-ups that will be part of the portfolio will be chosen as a group, democratically. The goal is to build and choose start-ups as diverse as possible, this reduces risk.
Once the investment deal is closed, we enter the stage of helping the start-up grow and walk shoulder to shoulder with the founders and angels in the group. And this is one of the most rewarding experiences in the process.
In the intramarket, transactions among shareholders are promoted, making it possible for an angel to try and sell their shares inside the fund without having to wait for the start-ups to exit. We know this method works as one of our funds implemented it a total of three times in the past successfully.
So, to sum up:
At COREangels, each fund builds a portfolio of diverse start-ups (usually between 13 and 25). Our intramarket promotes trade shares among current investors at the same COREangels fund. At a second level, all COREangels angels have access to this opportunity. If an investor goes through an unforeseen event in their life and needs liquidity, this method gives investors the flexibility to get it.
The seller investor sells the shares with a slight interest for opportunity cost. Their conditions are pre-decided inside the group. At the same time, other investors in the same portfolio get the opportunity to buy more shares in it. The buyer investor gets the chance to enlarge the investment and get a better return in the future. The buyer investor also acquired the seniority of the first investor. So, when the portfolio gets sold the buyer investor will get a higher return.
Thus, with this new method, there is no need to wait until the start-up's next financing rounds or a Merger and Acquisition, giving angel investors elasticity and security when investing.
At COREangels we want to reduce risks as well as give investors reliability by offering a very diversified portfolio. This is why we think the intramarket will change the journey of Angel Investment as we know it.