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Seed Capital From Angel Investors: Corey Silva, Assistant Manager, River Valley Investors (Part 13)

By guest authors Irina Patterson and Candice Arnold

Irina: What about the angel-backed companies, what can they do to improve their chances of success?

Corey: Reach out and get some of the coaching that you were just talking about [I was talking about 1M1M initiative] I’ve heard of other groups that do similar things, so reach out and get some of that coaching.

If they can find a way to attend some angel meetings – I know it’s not exactly easy – but if an entrepreneur should have any connection into an angel group or into any kind of investment group, or where they can get into one of these regional or national conferences, or if they can be a guest at a meeting – I know it’s very hard to do – but if there’s any way where they can see the profits ahead of time, that’s always a huge advantage. >>>

Seed Capital From Angel Investors: Corey Silva, Assistant Manager, River Valley Investors (Part 12)

By guest authors Irina Patterson and Candice Arnold

Corey: I think where you can get into some trouble is if you have too many of the ride-along types in the group, too many who are there more for the social aspect and don’t really have the time to put in. If you have too many of those without enough of the active, go-getter angels, then it’s easier for an angel group to become more of a social club than an actual investment group. There’s just always a balance that you’ve got to have.

A really important thing – something I’ve learned from RVI members – is to think creatively and to not necessarily follow the trends or, like a lot of groups, follow whatever’s the hot space or these guys have some credentials or look who’s on their board, they’ve got this fancy guy on their board . . .  A lot times of people get stars in their eyes. Even professional, successful angel investors can get distracted by things that aren’t necessarily practical or important. >>>

Seed Capital From Angel Investors: Corey Silva, Assistant Manager, River Valley Investors (Part 11)

By guest authors Irina Patterson and Candice Arnold

Irina: Do you charge a fee for entrepreneurs to present?

Corey: We do not. We charge no fee. In fact, not only do we not charge a fee for presentation, but we give free coaching services, for which most angel groups that have some kind of coaching services or boot camp or whatever charge. We don’t do that. >>>

Seed Capital From Angel Investors: Corey Silva, Assistant Manager, River Valley Investors (Part 10)

By guest authors Irina Patterson and Candice Arnold

Irina: What do you do with the deals that you decide not to invest in?

Corey: I’d say a slim majority of them don’t end up qualifying for our group’s interest. I’d say it’s accurate that less than half of the deals that my brother and I prescreen end up getting to the membership. But it’s not always because they’re not quality deals. Some of them aren’t quality deals. You get some crazy guy who’s got some idea he thinks is worth $20 million. >>>

Seed Capital From Angel Investors: Corey Silva, Assistant Manager, River Valley Investors (Part 9)

By guest authors Irina Patterson and Candice Arnold

Irina: Do you ever invest in deals that can go on generating dividends?

Corey: Yes. As a matter of fact, we’re looking at a deal right now. We haven’t invested in them yet, but we’re at the stage of negotiating terms. We’re just entering that stage. And that’s exactly the nature of that deal. It’s not the kind of company that they would want to sell. It’s the kind of company that looks like it has a really good shot of just providing significant cash returns on a yearly basis. So, again, that’s not a traditional angel-type deal. That’s not usually what angel groups are interested in, but like I said, our group is atypical. >>>

Seed Capital From Angel Investors: Corey Silva, Assistant Manager, River Valley Investors (Part 8)

By guest authors Irina Patterson and Candice Arnold

Irina: Do you pay attention to the total available market (TAM)?

Corey: Absolutely. That’s a huge factor, the size of the market. And how accurate we think the entrepreneurs are [in calculating it].

Irina: Do you have a benchmark for what size the market should be?

Corey: No. There’s no predetermined benchmark. It’s on an industry-by-industry basis. That number would be radically different in all different spaces. >>>

Seed Capital From Angel Investors: Corey Silva, Assistant Manager, River Valley Investors (Part 7)

By guest authors Irina Patterson and Candice Arnold

Irina: What is the typical return that RVI investors seek?

Corey: Like all angel groups, we’re always looking for 5 times and 10 times. We’ve had two exits so far, and both were profitable. I believe it was in the 33% area. I don’t remember the exact figures. We have not had a big 5 times or 10 times hit, yet. But we’ve also not lost, you know, we’re two for two so far in making money. Most angel groups only make money on two or three out of ten deals. So far, we’re two for two. >>>

Seed Capital From Angel Investors: Corey Silva, Assistant Manager, River Valley Investors (Part 6)

By guest authors Irina Patterson and Candice Arnold

Irina: How many investments have you made in the past 12 months?

Corey: Good question. I would say in the past 12 months, we’ve probably done maybe four deals, maybe five. I think there was a follow-on round with one of our portfolio companies.

Irina: Do you invest in roughly four or five deals a year?

Corey: I’d say on a yearly basis, it’s somewhere in the ballpark of three to six. >>>