Investor mandates

Angel Investor Mandate Interview: Morgan Hill Angel Group

Silicon Valley Angel Investment Club for Startups - Investor Mandate Interview

Founders pitching angel investors and investors who want to see how a small, independent angel group screens deals.

What to take from this talk

1. Investors keep their own checks. The group does not pool money. Each investor decides on their own, so a pitch that four members like gets four separate checks.
2. Balance beats a perfect score. Gary does not expect a 10 in every area. He looks for a pitch where nothing is below a five and the team, product and other parts are all present.
3. Think global, act local. Gary looks around the world and has contacts in Israel. The group has not invested internationally, because members prefer founders they can see and meet.
4. Proximity builds trust. Richard notes that it is easier to meet someone seven times if they are seven minutes away than seven hours away. Gary adds that it comes down to risk and management.
5. Do not fall in love with technology. Gary has seen this most in medtech, where founders promise to cure cancer. He says following the technology blinds an investor to the flags in front of them.

What you will hear

Gary runs a small angel group in Morgan Hill, California. It launched in 2011 and made its first investment in 2012. Since then it has put about 4.2 million in funding into startups. Members do not pool money. Each investor writes an individual check, so if four investors like a pitch, four checks are written. Gary chose this structure because he mainly wanted deal flow.

Richard C. Wilson asks Gary what gets deals funded, where the group looks and what he would tell other investors. Gary says balance matters more than a perfect score in any one area. The group thinks globally but acts locally, because members prefer founders they can meet in person. His main lesson is to not fall in love with the technology, especially in medtech.

Key facts

• The group launched in 2011, made its first investment in 2012 and has funded about 4.2 million since then.
• Investors in the group write individual checks instead of pooling money.
• Gary's rule of thumb is that nothing in a pitch should be below a five and all the parts should be present.

General education only. Not legal, tax or investment advice.

Talk to a securities attorney to explore options around angel group structures, investor eligibility rules and offering documents. Do not use AI to write your own legal agreements.

In their words

Related questions

• How do I close a funding round?I close a funding round by focusing on investors who fit the opportunity and moving each interested prospect through clear, consistent follow-up.
• What documents do investors request during due diligence?Prepare a clear, organized package covering your operations, investments, compensation, team, and track record.
• How do I raise capital for my business?I raise capital by building a repeatable system for attracting the right investors, establishing credibility, and developing relationships before asking for money.

Questions about this video

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