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Seed Capital From Angel Investors: Corey Silva, Assistant Manager, River Valley Investors (Part 5)

Posted on Tuesday, Jun 15th 2010

By guest authors Irina Patterson and Candice Arnold

Corey: And from all the quality deals, on a weekly basis, we sit down and go all right, this deal’s from this space, who knows that?, and this deal is from this area, who would be good for that? And we target the members whom we think would have an interest in the group and ask them to review the deals.

On a monthly basis, we send out an e-mail with all the new deals to all members. And then in person, at our members’ meeting, we have a roundtable, and before the companies’ presentations happen later in the meeting, at the beginning of the meeting, we go through all these quality deals that we saw in person and we solicit feedback and interest from the members.

So, it’s sort of a three-pronged approach, as opposed to having that dedicated subset of the group, we kind of make the whole group be part of the screening process . . . we get as many good minds working as possible.

Irina: And how many deals do you receive per week, approximately?

Corey: It varies a lot. Some weeks we only get one or two, some weeks we get ten. I’d say on a monthly basis, we probably see 15–25 deals, sometimes more.

Irina: Out of those 25, how many deserve a closer look?

Corey: Good question. A good way to determine that is by how many deals we actually bring to the group at that monthly meeting, how many pass through our pre-screening filter. And I’d say that ends up being between five and . . . we try not to review any more than 15 or 13. Once it starts getting that high, it gets to be unwieldy. So, I’d say on a monthly basis, the amount of deals that actually get to the group, past our filter, is somewhere between 5 and 15, out of that 20–30 deals that come in.

Irina: And some of those you just refer to others, right?

Corey: Right, there’ll be some times when we see deals that we think are promising but we know our group won’t like, because all groups are different. So, there are a lot of deals we see that even though we think they’re good deals, our group won’t have an interest in them. And there are deals that don’t necessarily get through our screening process but we still think they’re promising enough to send to other groups and see if they’ll pass through theirs.

Irina: So, once all the screening is done, do you have live presentations?

Corey: Yes, absolutely. It works as I just described to you, we source the feedback from the members, and the next step is . . . after they’ve done that initial, preliminary due diligence, maybe something as simple as a call with the CEO, reading through the business plan, maybe talking to a couple of their associates in the space, if after doing that initial homework, if they’re willing to give their thumbs up to present, we invite the company to present. And if they’re not willing to give their thumbs up, then we don’t. Basically, we don’t ask anybody to come in to present live unless there’s at least one person in the group who’s interested enough to be its champion.

Irina: And how often do you have live meetings?

Corey: On a monthly basis, but we take the summer off. So, we have ten meetings a year. We don’t meet in July and August.

Irina: What are the critical factors that determine whether or not you decide to invest in a company?

Corey: I’d say the most critical factors often end up being the level of experience that we have in that space and the perceived quality of the management team. I think those are really the most important things. Obviously, there are a lot of factors, but really the management team and the business models – that’s a huge factor – whether or not we think that will work out correctly. I’d say those are probably the biggest factors.

This segment is part 5 in the series : Seed Capital From Angel Investors: Corey Silva, Assistant Manager, River Valley Investors
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