With support from the University, student Matthew Leonard has started a St Andrews Angel Investment Network to help budding entrepreneurs achieve their dreams of running their own business.
Angel networks help to finance new companies at an early stage, before they reach the point at which traditional venture capitalists would consider investing in them.
The universities of Surrey, Harvard, Warwick, and Oxford have all created angel networks and successful spin-outs. Noting these examples of success, Mr Leonard decided than an Angel Netowkr could help St Andrews students and graduates too.
Robert Gelb, international opportunities manager at the careers centre, showed interest in the idea from an early stage. The chance to help boost ventures connected to St Andrews was an opportunity too good to miss, and the idea fit perfectly with the careers centre’s ambitions to fulfill St Andrews’ commitment to social enterprise and sustainability.
The process of creating an angel network at St Andrews started back in September 2014 when Mr Leonard began speaking to alumni about his idea. After gaining initial interest, Mr Leonard’s team began to connect interested people and establish boards in London and New York.
The network itself will have two central functions: mentorship and funding. The network will have no liability concerning the risks involved in funding, as being certified to participate in angel investing requires jumping through many hoops. Due diligence will be carried out by the network, but the central function will be creating connections between start-ups and interested investors. The mentorship aspect of the network will take place through Saint Connect, the alumni mentoring and advice service run by the careers centre. The specific details of investments will vary according to the needs of each start-up; different investors will require different levels of input, interaction, number of updates, share of equity, and will be able to give a different amount as an initial investment.
For the start-ups to be connected with potential investors they will have to fulfill certain criteria, depending on what state the start-up is at. the angel investors will not be interested in very young start-ups still at the proof-of-concept stage. Thus in order to gain support, start-ups will have to have some traction, users and a solid idea.
The network aims to tap into the experience and intelligence of St Andrews’ alumni network, within which there is a strong entrepreneurial tradition. The intellectual might of St Andrews’ alumni is in no question; alumni started companies such as DueDil, Fan Dual, Frontier Horizone and Angel News and were even involved in the development of Forbes in 1897.
Beyond the network itself, the St Andrews team has made some highly valuable partnerships with other angel investing groups. Groups such as Tiger 21, New York Angels, Potential VC, VentureFounders, London Business Angels and the Thatcher group (of which Ben Collins has been a particular help when setting up the angel network) and EOS Technology Investment Syndicate, among others, have agreed to partner with UStAAN to broaden the potential investing field for both startups and angel investors.These funds have agreed to a co-investment collaboration partnership that allows for two funds/networks to pass and share deals between them to ensure funding. This will widen the potential pool for both investors and start-ups.
Matthew and his support from the university, will be coordinating the whole enterprise and will ultimately be supporting the overseas networks as much as possible. When looking to the future, the St Andrews network does not have an aggressive growth plan, especially concerning developing more boards in new regions, at least until they have learnt from what works and what does not. It will be an organic growth and respond to demand, rather than force growth. The network is currently based in New York and London because they seek take advantage of willing intellectual talent, and are the most promising locations in which to set up this venture.
After a year of development, the University of St Andrews Angel Network is nearly at the stage at which it can start accepting pitches and begin connecting. The New York board is already at the stage of receiving pitches, however the official launch won’t be until the end of the year with deals beginning to be financed in the next 3-4 months.
This is a fantastic opportunity for new ventures to gain connections to influential and incredibly knowledgeable people at an early stage. Ultimately Angel investing is an alumni network with a practical purpose, organised around an interest in entrepreneurship rather than a specific location. Check out uk.ustaan.org (for the UK) and us.ustaan.org (for the US) for exciting updates about this venture.