Differences Between Investing Through Angel Groups, Incubators, Accelerators
And Why Making Investments Through BoomStartup Uniquely Delivers Variety of Vetted Pre-seed Opportunities.
May 16, 2022
By Steffi Baker
For angel investors, the name of the game is finding deal flow.
Vetting companies one by one can be extremely labor intensive and time consuming. Other ways angels can streamline the deal flow process and access multiple deals in one place is to join an angel group or connect with a startup incubator or an accelerator.
Angel groups, incubators, and accelerators screen and vet companies while working on the terms of the deal, which takes a lot of due diligence burden off the individual investor. They also facilitate meeting and collaborating with other angels.
However, the fees to participate in angel groups and incubators can run high. Also, it’s expected that you will invest in lock step with the group’s investment program, usually a fund.
Accelerators are generally more flexible. BoomStartup has one of the most robust offerings for angels in the marketplace, today.
BoomStartup Accelerator is an ideal place to connect with other angels and track market trends. It also offers a great deal of latitude to angels, allowing them to have as little or as much involvement as they wish, in a variety of areas.
Angel Investing Approach Comparison
- Geographic-driven deal flow
- Participation fees
- Management fees
- Investment activity expectations
- Member managed vetting process
- Member managed valuation
- Pooled funds
- Direct and/or fund investment
- Overseen by large entity or university
- Focused on industry, thesis
- Angels invest into a fund
- Incubator program runs 1-2 years
- Closed door vetting process
- Incubator controls valuation, investments
- Less opportunity for Angels to mentor
- Global participation from startups, investors
- Various industries, revenue models
- Pre-seed investment opportunities
- Angels can mentor, advise, or invest
- AmplifyUp runs roughly 12 weeks
- Graduates are vetted and investment ready
- Demo Day showcases graduates
- Angels choose each investment
- Minimum $5,000 investment
- No investment activity expectations
- No management fees
- Investment through Assure SPVs
BoomStartup has a remarkable track record, having worked with over a thousand early-stage companies from over 50 countries. It has a robust platform that monitors each business’s growth, quarterly. When a company does well in our education programs, it becomes a candidate for AmplifyUp, the intensive program for high-potential companies.
Angel investors and micro funds who leverage BoomStartup as a deal source only “see” the deals that graduate the AmplifyUp program (which are exciting online Demo Day pitch and demo events). Unless Angels ask to be investor mentors and engage these rising starts before graduation.
Angels can engage with BoomStartup’s contending companies in several ways – as an investor, as a mentor, or as an advisor. There’s no required time commitment and no forced engagement via minimum time or fiduciary contributions. Nor is there any fee or membership to pay.
BoomStartup doesn’t run a fund, so each angel is completely free to choose which company they invest into and investments start at $5,000 USD. If an angel chooses to join the SPV investment backing a company, BoomStartup charges a carry, which is a percent of the profit made by the SPV investors after the company has been acquired (liquidated) and the investors have been paid back for their equity stake.
BoomStartup’s assemblage of investable companies are a cut above most accelerators, due to the diversity of the founders and high standards for graduation from the program. Also, BoomStartup focuses on pre-seed companies – meaning post-revenue and initial traction – where funding is at a smaller level to flesh out a startup’s performance or break into a new market.
BoomStartup sees the pre-seed investments as a particularly good deal. The valuations are realistic, the term sheets are simple and straightforward, and the investor is getting a great value for their investment because during the seed round, valuations will increase with the additional revenue and customer base that the pre-seed round creates.