This is the New Angel Challenge Program
When we started Angel Challenge in 2015 we had an idea for a two month program to engage investors and empower startups. It wasn't a bad idea, but 3 years and 13 programs later we have learned a lot about what is good and what is not so good with the current Angel Challenge Program.
Therefore, over the last 6 months we have been working on a redesign of the old Angel Challenge Program, to create a new version keeping what is great and improving that which is less than great. We started from scratch and have turned every single element upside down to build a new program that we truly believe will be many times more powerful for the ecosystem than the old.
Basic components of any Angel Challenge program
The basic components of an Angel Challenge Program are simple.
1: Bring a group of 10 to 20 engaged and aspiring investors together for 2 months with workshops once a week.
2: Add a group of startups with growth ambitions to the mix, and let the investors and startups get to know each other properly. Why? Because investors invest in startups they know.
3: Facilitate an investment process and educate both the investors & startups about startup investing and company growth.
Result: Investors get to know startups, startups get to know investors and they start helping each other. If the startup is investor ready, they are likely to find a match in the investor group. Investments are probable, everyone learns a lot and investors become friends whilst building their network.
Out with the Old, in with the New program schedule
1: Selection (2 weeks)
20 startups and 20 investors get to know each other for 2 weeks before investors vote and select 5 startups that they want to continue working with.
2: Education, Due Diligence, and Evaluation of 5 startups (5 weeks)
20 investors and 5 selected startups work together over 5 weeks. This is where the learning took place.
3: Selecting a winner on pre-agreed terms (1 day)
The investors select 1 startup that received the full investment on pre-agreed terms.
1: Get to know each other (6 weeks)
All investors and startups spend 6 weeks together, learning about startup investing through weekly educational sessions, with networking and teamwork to get to know each other.
2: Selecting startups that are ready to fundraise (1 week)
After 6 weeks, the startups and investors agree on what startups should continue on into the remainder of the program. The “chemistry” has to be right, and both investors and startups should be convinced that the next stage is right for the individual startup. The investors in the group work towards helping their chosen startup fundraise over the next 1–2 months. A maximum of 5 startups are invited to join the third stage of the program.
3: Preparing the selected startups for fundraising (3 weeks)
The investors spend the next 3 weeks helping the startups prepare for fundraising. Build and agree on a term sheet, create a plan for the fundraising process
4: Fundraising in the real world (3–8 weeks)
Finally, the real-life fundraising begins. Both for the group of investors inside the program, but also towards investors in the greater Angel Challenge community and beyond. There are more than 300 alumni investors and friends eager to learn about the next startups coming out of the Angel Challenge programs.
What has changed?
The new program is a complete remodelling of the old Angel Challenge Program. We have taken everything we have learned from the 13 programs we have previously facilitated and designed a new program from scratch. Our goal was to keep the awesome parts of the program, and remove the unecessary parts, making the end result better and keeping an eye on the target, to enable great investors for all startups.
1: No pre-agreed terms
All terms are now to be negotiated on an individual basis through the program. In the old program, all startups and investors agreed on investment-terms prior to joining the program. This alienated loads of startups from joining and took away the experience of negotiating terms.
In the new program, all investment terms are to be negotiated through the program. Essentially, opening up the program for any startup to join, however much they are raising, think they are worth, or want to structure their investment. In the second half of the program, the investors and startups will have to agree on terms together.
2: No upfront commitment on investment
Historically we asked the investors to invest NOK 50 000,- up-front and everything would be pulled together into one winning startup.
We are now simply asking the investors to allocate a minimum of NOK 50 000,- of their funds with the intention to invest in a startup during the period of the program. This means we can never guarantee that an investment will happen, but we are confident that the process will lead to great startups getting funding, probably even more so than before.
3: More time with all 20 startups and 20 investors
In the old program, we selected the 5 finalists after only two pitching sessions. Now we will be working together with all startups for as much as 6 weeks before. 3–5 startups are selected to join the next stage.
4: No voting or hard selection
Angel Challenge is about helping startups become growth companies that want to evolve with investors. Voting and hard deadlines for selection is artificial and does not represent the real-life journey of fundraising. The only selection we are left with is who the investors want to invest in at the end of the day!
5: Investors take the decision themselves
We have previously pulled all investors into 1 syndicate investment in the winning startup. Not anymore. Every investor is now free to select which of the startups from the program they wish to invest in.
The investors now are 100% in charge of their own investment decision.
6: Better learning-material and learning-structure
Both investors and startups have been asking for training on a methodical approach to startup investing and company growth. Originally the program was designed to bring in knowledge-experts to present their view on a topic, leaving it up the external lectures to bring in all knowledge. This has been great, and we will keep a lot of this, but we will also make sure the basics of startup investing is covered by trained educators. Valuation, Due Diligence, Term Sheets, Investment Management, Metrics Tracking will all be better covered. Leaving each participant with a tool-book to use after the program is over.
The AC investment process
To sum it up, here is how we are structuring the program to make all this happen:
1: Get to know each other
Investors and startups get to know each other for 6 weeks.
2: Finding a lead investor in the program
During these 6 weeks, the startup founders need to find at least 1 investor from the group that would like to be their lead investor for the rest of the program, helping them become investor ready.
3: Agree on 3–5 startups to help with fundraising
In week 6, the investors select 3–5 startups that they want to negotiate investment terms with. The lead investors have to argue for why their favourite startup should take part in the next stage.
4: Negotiate terms and help startups get investor ready
Week 6–8, the startup and lead investor negotiate terms. Valuation, investment structure, and fundraising plans are all the being discussed and agreed.
5: Fundraising is on
After having agreed on terms with the lead-investor fundraising begins. The startup and lead investor go out into the real world and fundraise for the startup with the terms that have been negotiated. The other investors from the program are challenged to select a startup to support, and the job is on to convince external investors and the greater Angel Challenge community to join the investment round.
6: Closing the deal
The Challenge is on for the startups and investors to find investors to fill up the round! This is real life… Angel Challenge is simply a facilitator, a playground and learning arena.
Good luck! We can't wait to meet the new group of investors and startups who will work together this fall to support the next industry leaders from our regions!