OUR FUNDING PROCESS
IT'S ABOUT GETTING TO KNOW YOU
AND YOUR BUSINESS BETTER.
1. APPLICATION REVIEWPasadena Angels receives 40+ applications for funding each month. We review all applications to assess whether the investment opportunities meet our funding criteria. Additionally, we frequently request additional information such as YTD revenue, deal terms, etc. We endeavor to ensure that everyone who applies will hear back from us.
2. PRE-SCREENING PANEL REVIEW – 1ST ROUNDFrom the pool of applications, we select approximately 15 companies to pitch to a Panel. The Panel consists of up to four active Pasadena Angels members. The format is Pitch followed by Q&A. Panelists then discuss the merits of each investment opportunity and decide which companies to invite to our next round, the Screening Meeting.
3. SCREENING MEETING – 2ND ROUND (Last Wednesday of each month):The top 4-6 companies from the Pre-Screening Panel round are invited to stay in our process and advance to our Screening Meeting where 25-30 Pasadena Angels members hear pitches and ask questions. The members vote and select two companies to advance to our final round. Deal Leads are usually assigned to support the entrepreneurs.
4. COMPANY EVALUATION BREAKFAST MEETING – FINAL ROUND (First Wednesday of each month)Two companies pitch to the largest audience of Pasadena Angels members at our monthly Breakfast Meeting, which utilizes a hybrid in-person and Zoom format. The companies pitching in the final round are not in competition with each other – both can attract investment from Pasadena Angels. Most of the companies advancing to this stage advance to Due Diligence. After the Breakfast Meeting, we poll our members to gauge interest in the investment opportunities and hold a further 45-minute Q&A breakout session for each entrepreneur and Pasadena Angels members interested in learning more about their venture. Assuming there are still sufficient members interested to continue learning more about the company after the Q&A breakout session, a Due Diligence meeting is scheduled for the next week.
5. DUE DILIGENCE MEETINGPresuming there is sufficient interest from our members, a Due Diligence meeting is scheduled for the following week to discuss details and agree on next steps. These sessions are conducted remotely via Zoom to allow as many potential investors as possible to participate. Recordings of the sessions are generally available for members unable to attend.
6. TERM SHEET NEGOTIATIONWith Term Sheet Negotiation, we enter the final phase of the investment process and get down to the details involved in finalizing the deal. Initially, key details are outlined during the Due Diligence phase of the process. Next, we’ll carefully consider the amount of capital under discussion, and evaluate the opportunity for the potential investment. The Term Sheet sets forth terms and conditions of the proposed investment from both a business and a legal perspective. The key offering terms generally include items such as the following: Investment Instrument Amount of Capital Raised Valuation Price Per Share Board Seats Warrants Reporting Rights Liquidation Preferences Voting Rights Anti-Dilution Provisions, and Registration Rights Ultimately, we seek to achieve a win-win outcome for all parties.
7. POST INVESTMENT PARTICIPATIONThe members of the Pasadena Angels have strong ties to local business and professional communities. Their experience, relationships and guidance can significantly contribute to an emerging company’s success. Typically, members of the Pasadena Angels serve on advisory bodies or boards of directors of companies that are funded after proceeding through our review process. This member participation facilitates the strategic/financial planning and efficient plan execution required in the initial growth phases of new business ventures. Pasadena Angels also provides added value through: Relationships with venture capital firms and other angel groups that can lead to co-investment, syndication and/or later-stage investments in an enterprise. Interim executive management and consulting, when requested. Advice or assistance with sales and marketing, recruiting and building strategic relationships. Access to cost-effective business facilities and support services. Pasadena Angels is also an affiliate of the Tech Coast Angels (TCA) network which affords entrepreneurs the ability and efficiency to potentially pitch to a group of more than 500 members throughout the robust Southern California start-up ecosystem, using the same application, as well as syndication opportunities throughout the country.
Should you meet our Funding Criteria, we invite you to submit your application online. Typically, we will contact you about your application within 1-3 weeks, and may request additional information.
Your application materials will then be reviewed. Companies that fit the overall investment interests and goals of our members will be selected to pitch to a Pre-Screening Panel.
As part of Pasadena Angels' monthly funding cycle, 4-6 companies are invited after the Pre-Screening Panels to pitch at our Screening Meeting. Screening Meetings are held on the last Wednesday of each month. From this group of entrants, we will invite the top two companies to present to our entire membership at our monthly Breakfast meeting on the first Wednesday of each month.
Your presentation to our full membership at our Breakfast meeting will include an initial Q&A with interested members. The following week, potential investors will then begin due diligence by taking a closer look at your business plan, projections, track record and background.
When the due diligence process is completed, interested members from our group will collaborate with you on deal terms to align on those being offered and/or potentially suggest changes, generally using industry standard terms and provisions.
If all parties decide to move forward, the work begins to finalize the deal and execute to a closing. As the process for each company is unique, the collaborative work we’ll do together depends on open lines of communication and teamwork to achieve success.