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Seed Capital From Angel Investors: Peter Birkeland, RAIN Fund Program Manager, RAIN Source Capital (Part 3)

Posted on Friday, Jul 2nd 2010

By guest authors Irina Patterson and Candice Arnold

Irina: Is there any place on the website where entrepreneurs can e-mail you?

Pete: On our general website, we’ve got my bio on there with an e-mail. The issue is, though, we have to have a RAIN Fund in the area. So, if someone from Arizona sends us a business plan, it’s going to be really tough for us to do anything because we don’t have a RAIN Fund in that area.

Irina: So, you do talk to entrepreneurs.

Pete: We’re not shy. We’re public about what we do. We speak about angel investing; we’re passionate about it.

We’re big believers that innovation and startup businesses have to get funded, and we think we have vehicle to do that through our RAIN Funds. In order to make that vehicle as valuable as we can we need to have good, solid deal flow and that means we have to talk to a lot of entrepreneurs.

Irina: On average, from all sources, how many pitches do you receive a month?

Pete: About 150 throughout the network.

Irina: How many pitches would you like to receive a month?

Pete: With the size of the network we have now, I guess I’d say we’re comfortable at that number. Obviously, you’d like to see more, but we think we’re seeing as many good deals as we can.

As our network grows, we want to see more. We’d like to, obviously, as we add more RAIN Funds, we want to see that deal flow grow in proportion.

Irina: Out of all the pitches you receive, how many deserve a closer look?

Pete: Well, let me kind of walk through the process because I think that will help. So, what happens is when an entrepreneur comes to us with a company – I’ll just use myself – I would do a screen on it, look at it, just make sure it made sense, check my source of the referral.

And then maybe do a quick half-hour meeting with the entrepreneur just to see if there’s some interest.

If there’s enough interest from that meeting, then we refer it into one of our RAIN Funds. That RAIN Fund then has a screening committee made up of the members. Those members would review it. After that review, they would decide whether to go ahead with it, pass on the investment or ask for more information.

As it goes through the screening, once it gets approved, then it would go to the membership to view it at a meeting. They’d view the entrepreneur coming in, making a pitch, and answering questions.

At the end of it, they’d decide, Well, do we want to go forward with this, get more information, or pass? Once the members say, We want to go forward, a group of members comes together, does the due diligence, writes up a report, presents that back to the members for a vote, up or down or more information.

And that’s kind of how the process works. We try to do it as quickly and efficiently as we can, but that’s really how our process works.

This segment is part 3 in the series : Seed Capital From Angel Investors: Peter Birkeland, RAIN Fund Program Manager, RAIN Source Capital
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