Have you considered getting involved with Rockies Venture Club?
Who we are.
RVC is the longest running angel group in the U.S. and possibly in the world. We’ve been holding angel investing events since before it was called “angel investing.” Founded in 1985, we’ve been operating continuously, investing in early stage startups, creating jobs and serving as the “Switzerland”, or impartial educator and connector of investors and entrepreneurs. Our education programs are unique in that we serve angels and startup CEOs alike, teaching the same language and tools, so that relations between startups and investors are more transparent and create greater value in our ecosystem.
The Rockies Venture Club is a 501(c)6 nonprofit organization, and it’s sister organization, the Rockies Venture Institute is a 501(c)3 nonprofit focused on the education and accelerator programs. We’re also supported by Rockies Venture Adviser which runs the Rockies Venture Fund, Rockies Vintage Funds, and Pandemic Impact Fund, all of which are co-investing with RVC angel investors to create a synchronous path to capital access for founders and tax advantaged access to great deals for investors.
The RVC has about 200 angel investor members and a similar number of startup members. We invest primarily in Colorado, but we’re much bigger and have programs that extend nationally and internationally, as far away as Australia and New Zealand. We are a highly active member of the Angel Capital Association and our Executive Director serves on the ACA board as Treasurer/Secretary and Executive Board Member.
RVC has engaged with syndication networks which bring us high quality deal flow from around the U.S. and which also help to bring syndication dollars into Colorado. Syndication is one of the most powerful tools that an angel group can bring to its investors and startups that we fund.
RVC has been recognized internationally for its high quality education programs, due diligence process and deal flow. Investors benefit from a community oriented organization that has spent years to develop networks and systems to benefit everyone.
Attend RVC Events
RVC has over 140 events every year. These events range from conferences to investor forums, master mind sessions, classes and workshops, special get-togethers, pitch events and due diligence rallies. Investor members get free access to everything, but you don’t have to be a member to try us out. Events are open to the public for a nominal fee which can be applied to your membership, should you decide to join later.
RVC events are designed to maximize networking and get to know fellow investors and learn from each other. RVC also offers great content and educational opportunities, and, of course, pitches from pre-screened and trained entrepreneurs.
Invest in Startups
Investing in your own community here in Colorado and creating local jobs is not just good for economic development, but it can be good for your bottom line. Investors who make angel investments in startups with an angel group typically see returns of 20-30% IRR over their portfolio. And that doesn’t even account for government sponsored tax rebates of 25% back on investments you make in Colorado companies, or 100% break on federal income taxes for returns on your angel deals. Add it all up and your cash on cash returns can be remarkable!
Early stage investment has its risks, but it’s not as risky as you think. RVC’s education program and group approach provides you with deep due diligence, post investment management, and advice on how to build a portfolio that buffers the winners and the losers to get the above mentioned returns overall. It’s not for the faint of heart, but is a lot of fun and quite profitable for those who take it seriously.
RVC has a portfolio of over 150 investments made in about 60 companies. While four or five of those have shut down, nine or ten have exited, returning cash to investors, and the remainder are continuing operations and working towards profitable exits.
RVC Investor Members get access to a two day angel investor accelerator program held every quarter with classes and workshops with hands-on work to get you up to speed with angel investing. Every month there are refresher courses and also investor forums where you can work with your peers to evaluate deals and learn from their experience.
Angel investing is fun when you have hands-on interaction with the CEOs of innovative companies and peer collaboration with other experienced investors. There is always a lot to learn about the latest cutting edge technologies and the people who are using them to disrupt industries.
RVC investors get access to deal-flow that is filtered from about 1500 deals every year. We then pitch about 75 of those and end up investing in 25-30 annually. You can invest in an annual fund and spread your investment across about 25 deals, or you can make up your own mind on each deal as it comes along. There’s never a requirement to invest in anything at all if you don’t want to!
RVC angels get access to great tools to manage their investments including the GUST deal management platform, the RVC Deal In Play site where you can find all the deal particulars and invest on-line 24×7, and also the Seraf-Investor platform that tracks your portfolio for you and produces performance reports and more.
Angel forums and the angel accelerator are only available to members, but if you would like to become familiar with the process before joining, consider taking some workshops, or attending a conference or pitch event. You can find out about upcoming events by subscribing to our newsletter for free.
If you’re ready to get access to deals and attend angel forums, consider joining RVC. You can get more information on membership and sign up HERE.
Maybe you would like to talk to me, Peter Adams, Executive Director of RVC, to get more details? I’m always available and you can book a phone or zoom call here on my private calendar. www.calendly.com/pandemicimpact
What does it take to be an Angel Investor?
Angel investors come from a wide range of backgrounds. Some are retired, others are active business leaders, others have founded and exited their own business and are looking to give back to the community, and others are just looking for great tax advantaged returns on their investments.
Angel investors do have to be “accredited investors” according to SEC regulations. Traditionally, this has meant that angels need to have EITHER a net worth of $1 million or more excluding their primary residence, OR income of $200,000 or more ($300,000 for married couples) for the past two years. New guidelines from the SEC allow ANYONE to become accredited by simply passing a test. You can find out more about that HERE.
Traditionally venture capital investments have not been available to individuals and minimum investments have been $1 million or more, but in the past decade angel and vc investments have become much more accessible and high return tax free investments are now accessible to virtually anyone.
Angel investors are typically people who like to be more involved and invest locally with CEOs of startups that they get to know personally. You just don’t get that meaningful relationship with your Wall Street ETFs and Mutual Funds. Angels seek high returns and understand how to manage risk with portfolio strategies. RVC offers great workshops to teach these strategies for both seasoned and new angels alike.
There are many different kinds of angel investors. Some like to join groups for the social and interactive parts of the group while others are looking for expanded deal flow and others are looking for educational opportunities. RVC offers something for everyone, regardless of their desires for different types of engagement.
The Angel Investor Accelerator Program
Let’s face it, angel investing has some rules all its own that separate it from “regular” business or public market investing. There are issues surrounding valuing a company, doing due diligence, understanding term sheets and deal structures, smart strategies for angel portfolios, guidelines for tax free investing, analyzing exit opportunities for acquisition or IPO and more.
You can’t learn this stuff in any MBA program, so we’ve brought you the content from the Venture Capital for Dummies book (written by RVC team) and put it into two days worth of super-intense, hands-on education programming in order to jumpstart your angel investing learning process. You’re learning straight from the experts who literally wrote the book on this subject!
RVC is a professional angel group and we take angel investing seriously. Others follow “spray and pray” investing strategies without much care for deal structures and due diligence – and frankly, they don’t do very well. We’re here to shorten the learning curve for new angels, and even for experienced angels who want to learn some of the latest cutting edge techniques that we’ve gleaned from our relationships with angels and VCs around the world.
The Angel Accelerator is free with your Active Angel Investor membership. The cost of similar classes elsewhere can be as much as twice the price of the membership alone and you get access to this program once a quarter and you can participate in it as often as you like.
To sign up for your Active Angel Membership, you can click HERE, or to follow-up with us for more questions, you can book a call or zoom meeting HERE. Once you’ve joined, you can register for the Angel Accelerator, Angel Forums and other workshops HERE.
You have done well and learned a lot about business and management over your career – are you interested in giving back and helping others?
Mentoring is a great way to engage with promising startup entrepreneurs and helping them with knowledge and experience you have gained over the years.
RVC has multiple mentoring programs ranging from group mentoring at MasterMind sessions once a month to coaching at the Pitch Academy or for presenters at the Angel Capital Summit conference, to formal mentoring at our twice-yearly HyperAccelerator program. You can mentor as little or as much as your schedule and interest permits without obligation for long-term commitments.
It feels great to be a mentor, and I’ve found that while I’m helping startup companies, I am actually learning a lot about leading edge technologies and solutions to business and healthcare problems.
We would love to have you on-board! You can find out more about volunteering here.
Also, don’t forget to sign up for our newsletter so you can keep up to date on future volunteer opportunities.
What if you don’t have the time for Angel Investing?
We admit it – angel investing can be time consuming if you really dig into it. We recognize that not everyone has a lot of time to devote to angel investing while others are ready to dig into due diligence, mentoring, serving on committees, having board positions and more. RVC is set up for members to be able to engage at whatever level they are comfortable with.
Passive members have access to RVC deals and have the comfort of knowing that groups of experienced investors are working on the deals coming across the platform. You can invest in just a few minutes on-line after reviewing the pitch, due diligence documents and as much additional research as you like. Investing is as easy as clicking a DocuSign link and wiring funds. You’ll receive regular updates from the companies and we’ll send you K1 documents for your tax records every year. That’s it.
You can get a little more involved by attending the monthly chapter meetings where you can get to know fellow angels, discuss deals and watch live pitches from pre-vetted companies seeking angel investment. This is a great way to meet founders and be able to get to know them and ask questions directly.
For those who want even more engagement, consider joining the screening committees that meet monthly to select the companies that will be pitching to the technology, life science and cleantech chapters.
You can also volunteer as a due diligence analyst and help to research some of the companies going through the process. The due diligence teams kick off research and composing a professional due diligence document that takes about three weeks to complete and each analyst might do one section on the product, team, markets, intellectual property and legal landscape, competition, financial strategy, exit strategy, valuation and more.
For less commitment, you might sign up to mentor a company going through the process. It’s up to you.
Still not sure what Angel Investing is all about?
We get that – it’s not obvious. If you’ve seen Shark Tank, it’s kind of like that, but friendlier, more engaging and you get a seat at the table. We do a Colorado version of Shark Tank that we call Trout Tank. It’s all about helping startups while providing great investment opportunities for angels.
How much money is required to invest? Well, actually nothing is ever required, but if you do decide to invest in a deal, the typical minimum is $10,000. Most RVC investors are in the $10,000 to $50,000 range for most deals with a few that occasionally jump in at $200,000 or even $500,000. Angel portfolios typically have about ten deals or more in them and the total of those should not exceed 10% of your total investable portfolio in general. So, it’s really up to each investor how much they invest and how many deals they do.
What do the deals look like? RVC deals are typically Preferred Equity investments into a company. We generally buy 5-25% of the equity in any one round. As a group we might invest as little as $100,000 or as much as $2 million. The average for our group into any one deal is about $350,000. The typical raise we participate in is $500,000 to $2,000,000. The typical valuation of companies we invest in for the first round is $3,500,000 to $5,000,000. Angels can invest in just one round, or they can continue to invest their pro-rata in follow-on rounds that we invest in companies on average after about eighteen months.
What kind of returns do angel investors seek? We are looking for a minimum of ten times our investment back in about five years. Deals that have a good probability of getting thirty to one hundred times our investment are not unrealistic. Over a portfolio and without including tax rebates and tax free returns, angels should expect returns between 20-30%.
But I’ve heard angel investing is risky? Yes, there are risks. In fact, about 35% of deals we invest in will go completely out of business. Another 15% will return less than a dollar for every dollar invested. But the remaining 50% will return two to two hundred times your investment, or more. That’s why we recommend the portfolio approach vs. putting all your eggs in one basket. Between winners and losers you can reasonably expect 20-30% returns – often 100% tax free.
What kind of companies do you invest in? We’re investing in Seed and Pre-seed stage investments in markets that offer the ability to scale to 10X returns or better. This means that we are typically in tech companies including health tech, financial tech, insurance tech, business to business software as a service, enterprise software, Internet of things, cryptocurrency technologies, consumer goods, natural food and beverage, digital healthcare, drug companies, medical devices and diagnostics. We’re industry agnostic, but look for great returns. In general we haven’t invested in real estate, oil and gas or cannabis companies – but we wouldn’t rule them out if the right deal presented itself.
If investing in companies like this sounds interesting, you can join RVC by learning more HERE and signing up today. If you still have questions, we’re always glad to chat. Click HERE to schedule a one-on-one with our executive director, Peter Adams.
Programs for Women and Investors of Color
RVC offers special programs for women and investors of color. Venture capital has notoriously been focused on white male founders and we’re interested in supporting the best companies regardless of the race, gender or sexual orientation of the founders. The best way to be friendly to underserved founders is to create a positive culture that includes diverse investors that have insights into market opportunities that a homogenous investor population might not be aware of.
Our Women’s Investor Network has been very active with monthly women’s events that focus on investing in women -led businesses, special education programs for women investors and peer group mentoring to help new women investors to feel comfortable with how things work. For more information about this program, contact Emily Klein (email@example.com).
Our data shows our commitment to diversity. RVC’s portfolio has 45-50% women founders, and 14% founders of color. These numbers are working towards matching the demographics of our community, but we still have a long way to go. RVC is working to access grant and sponsorship opportunities that will allow us to offer special programs, free access to RVC training and mentoring for women and founders of color, membership incentives for women and investors of color, special investment vehicles that support pre-pre angel deals to help with the friends and family rounds that underserved founders don’t have access to.
Tax Advantages that even your Wealth Advisor and CPA probably don’t know about
One of the big advantages of investing in early stage companies with an angel group is that you have access to tax advantages that the individual investor doesn’t have the access to or the leverage to create.
For Colorado investors investing in Colorado companies we can offer 25% tax rebates on many investments through the OEDIT tax credit program. So, if you were to invest $20,000 in a company, you would get $5,000 back from the state as a tax credit, meaning that you only have $15,000 at risk in that investment. This provides extraordinary front-end tax incentives that public markets don’t offer.
RVC is also a leader in structuring its deals to take advantage of IRS tax advantaged structures that provide 100% tax free returns up to ten times your investment. This means that if you invest $100,000 in a deal and it has a 10X return, you pay zero taxes on your profits. That puts you at a 22.7% advantage over your public market investments that you have to pay long term capital gains taxes on. RVC’s knowledge and investment leverage gives us an edge to our investors, at no cost to our portfolio companies.
Let me give you an example. If you are an individual investor, putting $25,000-$50,000 into a deal, you don’t have enough leverage to structure a tax advantaged deal. But if you’re part of a national syndicate that could put $500,000 to $2,000,000 into a deal, then a company will be more flexible in doing an equity deal and converting to a C Corporation (if necessary), in order to meet your tax advantaged deal requirements. At the end of the day, smart angel investors in a group can do 22.7% better than lone eagles who invest alone.
When you think about it, your investment in Rockies Venture Club membership is likely to give you a 10X return on your investment even if you only do one deal!
If you add it all up, with 25% off on the front end and zero tax on the back end, angel investments end up with greater cash on cash investment potential than most public market investments your wealth advisor is promoting. (By the way, we’re public market investors too – and we allocate a relatively small portion of our investable capital to angel investments, and we recommend the same for our members.)
RVC offers free webinars for potential angel investors that demystify the angel investing process. These webinars are interactive and you have the opportunity to ask questions and dig deeper into how it all works. If you would like to participate in one of these, we offer them on a monthly basis and you can sign up at www.rockiesvc.org.
If tax advantaged investing for a portion of your portfolio is interesting to you, consider joining RVC HERE. Or, if you would like to talk to us and get more information, feel free to schedule time to talk on our calendar HERE. We would love to talk to you.
RVC Membership Benefits
We like to say that investors should seek at 10X return on their investments within five years. Well, investment in an RVC Investor Membership could return far more than that in just one year! Here are just some of the benefits of RVC Membership:
- Free access to conferences for you and a friend all year long (140+ events free)
- Access to curated deal flow.
- Free due diligence and community engagement.
- Angel Accelerator and refresher courses – Free
- Wisdom of Crowds – invest with others who bring expertise in a wide variety of industries.
- Syndicate Networks – RVC provides access to deal flow from angel groups around the country and around the world which have been vetted, diligenced and invested in by the top angel groups.
- Tax advantaged investments – up to 25% off on the front end and 100% tax free on the back.
- Angel Capital Association membership is included with your RVC membership. Get free access to live webinars from the top angels and vcs in the country and access to a massive library of past webinars. ACA brings you policy representation in DC, best practices, education, conferences, syndication and more. Your RVC membership gets you free and discounted access to the top professional angel investor best practices.
- Tools to manage angel investments. RVC investor members get access to our GUST platform for incoming dealflow. We also provide members with Pitchbook access for in depth research (worth $25,000 per year) thanks to a sponsorship from Richtr Financial Studios. Pitchbook provides comparable data, exit information, competition and more. RVC deal in play website lets you review deals in play, docusign and wire funds to invest in just minutes. Seraf-Investor platform to see your investments, analyze performance, get updates and more.
- Community of like minded individuals who take angel investing seriously and have fun working together to create jobs, foster innovation and make great tax free returns.
We hope we’ve shown you how fun and profitable angel investing can be. Please, if you’d like to learn more, reach out to us. We’re available to answer your questions and point you in the right direction. If you would like to join in on one of our angel forums to see how it works as our guest before joining, we would be delighted to have you. Just send us an email at firstname.lastname@example.org for a complimentary pass to an investor forum, or CLICK HERE to schedule a call or zoom meeting to find out more and get your questions answered. We would be honored to have you be a part of our community!
Executive Director, Rockies Venture Club
Managing Partner, Rockies Venture Fund
Managing Partner, Pandemic Impact Fund
Co-Author, Venture Capital for Dummies