Why InCrowd's Angel Groups?
Whether you are interested in helping entrepreneurs achieve their dreams, are looking for long-term capital returns, or are looking for a new, exciting way to invest, InCrowd makes anyone feel comfortable investing in startups.
InCrowd Builds Comfort In Four Ways:
We Handle The Confusion
InCrowd makes it easy to invest in startups by handling all of the complicated stages of investing in startups. Deal term negotiation and legal and tax document preparation are all handled for our investors. We also work with leading accelerator, university and incubator programs from across our entire Southeast InCrowd network to provide deal flow to our members.
Networking & Live Events
Unlike most angel groups, InCrowd does not feel cliquish or unwelcoming. Every month, InCrowd hosts live pitch events that allow our members to get together to meet each other and network, discuss investment opportunities, and to see the entrepreneurs pitch in a live setting. We record the pitch sessions so any member that can not make an event can watch the presentations online at a their own convenience.
Low minimum investments
InCrowd members can invest as little as $5,000 in each investment opportunity they choose to fund. This allows our members to write smaller checks in line with their level of comfort, as well as allowing them to spread their money across a larger number of companies.
Only trained Companies
InCrowd only allows entrepreneurs going through partner accelerator training programs, university programs and local business incubators to list on our platform, ensuring that you have access to investment opportunities that have been screened and trained through these programs. Investors who sign up for InCrowd angel groups have access to investment opportunities from our entire network of partner programs across the country.
Each company will provide information in a consistent format using our online platform, making it easy for investors to compare the best opportunities. When you find a company that interests you, InCrowd makes it easy to make investments in the companies you like best.
This group, which focuses on Tennessee-based accelerator programs, is for companies that are enrolled in, or are graduates of, accelerators program across Tennessee, including Nashville, Chattanooga, Knoxville and Memphis, among others. Here are some accelerators we have worked with so far:
How do InCrowd Angel Groups work?
After signing up for an InCrowd angel group, you will find the investment opportunities from across our entire network of companies in your account profile. As mentioned above, you will only see companies that have graduated from, or are currently enrolled in, accelerator training programs or university entrepreneurship programs.
Through our online platform, each company will provide information in a consistent format, making it easy for you to compare companies. You will also be able to take notes on each company and rate each aspect of their business plan to help you organize your thoughts and identify your favorite companies.
In addition, each company will have a chance to present their ideas at a live event to the angel group. You will have a chance to watch the entrepreneur present and then ask any questions you might have about the investment opportunities.
Two specific trends in the startup community make now the perfect time to get involved in an angel group: 1) the reduction in the cost of starting up a company, and; 2) the advent of accelerator programs and university-based entrepreneurship centers.
Over the past ten years, the cost of developing technology needed to start a new company has drastically declined. The decline has allowed angel investors to invest at a lower risk profile than in the past. Angels can now get in at a later stage in a company's life cycle than in the past, reducing the risk to angel investors.
In addition, the past five years have seen a boom in entrepreneurship-focused educational and assistance programs across the U.S. Accelerator programs, the majority of which are less than five years old, screen startup companies and train them on best practices increasing their chances of success. Universities across the country have launched similar educational programs, allowing entrepreneurs to get a head start through the use of mentors and educators. InCrowd only accepts companies that have gone through one of these intensive programs.
For many people interested in investing in startups, the process and the current investment ecosystem can be intimidating. Most angel groups are cliquish and can feel like "good-old-boys" clubs where everyone knows each other. InCrowd was created to make anyone feel like they are a part of the investment "incrowd" no matter their level of experience.
We do this is several ways. First, we have lowered the minimum investment levels to make it easier for people to diversify or get comfortable making investments. For example, we know that there are many people out there who would be willing to invest $5,000 in ten companies, but not necessarily $50,000 in one company. For that reason, we have structured our platform to allow any investor to commit as little as $5,000 in an investment.
In addition, we do some hand holding along the way for those who need it. We negotiate deal terms with the entrepreneurs and line up all of the paperwork for each investment. All of our angels get the same terms and invest together as a group.
Finally, we have lowered the barrier to entry with the lowest fees in the industry - our annual fee is only $1,500. In addition, unlike other angel groups, when you make a personal investment through InCrowd we do not take a fee based on your investment amount or take a carry on your personal investments.
How are the potential investments vetted or selected to participate?
The businesses are vetted in two ways:
1) Entrepreneurs have to have graduated from an incubator, accelerator or university program to list on our platform. Not only does participating in a program increase the chances of success due to the educational, mentorship, networking and training aspects of the program*, most programs have an application and acceptance process that further vets the participating companies.
2) Through our proprietary rating system, angels will be able to use the "wisdom of the crowd," by seeing an aggregated score for each company based on the ratings of the other angels in the group. Each company will be scored individually by the angels, who will be able to make investment decisions based in part on the aggregated ratings of their peers.
*According to the National Business Incubation Association, a business that goes through an incubator program is twice as likely to succeed as a business that does not.
How much does it cost to participate?
InCrowd has two membership tiers as ways to get started - Standard Membership and Premium Membership. Our Standard Membership allows investors to participate as individual angels in our group. They get access to all of the services listed above and can make investments as low as $5,000 in any of the companies they like. Standard Members pay a $1,500 annual membership fee to access our platform and live events.
Standard Membership is best for investors who like to be active with their investment selections and choose the investments on their own.
In addition to the angel group aspect of InCrowd, we also have a side-car pool that invests alongside the angels in the group. The side-car pool investments are made based on the decisions made with the help of an investment committee consisting of five to seven InCrowd members. The side-car pool gives us an advantage with entrepreneurs in that, unlike other angel groups, we can give entrepreneurs a definitive yes or no on whether they will get an investment from our group, and in that it allows us to commit to a minimum investment level, currently around $40,000, if they do get a yes.
The Premium Membership is for members who invest at least $25,000 in the pool, which allows us to make the commitment to entrepreneurs. Premium Members pay 3% for an investment commitment under $100,000 or 1.5% for an investment commitment of $100,000 or more. The pool also takes a 15% carried interest. Premium Members also get access to all of the Standard Member benefits and can always make additional investments in the companies that they like most.
Premium Membership is ideal for investors who want to have an investment position in startup companies but who may not have the time to vet all of the deals coming through our platform. Premium Members will have a stake in each company that InCrowd's investment committee decides to invest in. If they do wish to be more active, on top of having a stake in each company through the pool, they can always invest additional funds in the companies they like best, just like Standard Members.
How Does the Premium Membership Work?
As a Premium Member, you have access to our Standard Membership tier as well as potentially lower fees and a more passive investment opportunity. Any Premium Member can still make individual investments, but as a Premium Member, you will get a portfolio of early-stage investments even if you do not have time to participate in individual deals.
Premium Members who commit to invest $25,000 in the pool do not invest their full commitment all at once. There are three capital call periods each year, October 1, February 1 and June 1. Your first installment will only be for 20% of your full commitment, followed by two additional installments for 40%. Your first installment will be made upon sign up, and the remaining installments will begin on the closest installment date after your sign up date.
How Do I Get Started?
To sign up for an InCrowd angel group, use the registration link on the top of this page or click below to begin the process. You will be asked to fill out a brief application with your contact information and to answer a few questions about your investment preferences; then follow the payment instructions to complete your registration. The process should take no longer to than a few minutes to complete.
What happens after I sign up?
After you sign up and confirm your account, you will be able to log into your account for more details on the current investment opportunities. After signing up, you will have access to the information on each company.
We list one or two new companies each month. On the third Thursday of the month, we host a live pitch session, where the entrepreneurs listed that month present their ideas live to our angel group.
At these events, you will also have the opportunity to network with other members in your angel group.
Here are the details for our live events (times and dates can vary):
- Date: The third Thursday of every month
- Time: 12:00 pm – 1:30 pm
- Location: Nashville Entrepreneur Center. 41 Peabody Street, Nashville, TN 37210
- Details: Lunch is included! Come prepared with your questions.
Who can sign up for an InCrowd Angel Group?
This group is only available to accredited investors. "Accredited Investor," is a legal term, and is defined as investors who either have a net worth of over $1 million, not including their primary residence, or have income of $200,000 or more in each of the past two years with an expectation to earn over $200,000 this year (or $300,000 if including a spouse). Anyone who meets either one of those two criteria is considered to be an accredited investor.
Are the companies I am investing in local?
That is one of the beauties of the InCrowd program – you get to choose. If you want to only invest in local companies, you can focus your attention on companies in your region. However, when you join InCrowd, you will have access to our entire network of investment opportunities. You can find a list of the current regions we represent on our website by clicking here.
What industries are the companies in?
Our angel groups do not focus on specific industries, but our partner accelerator programs might have industry focuses. For example, for this group, companies associated with the Nashville Entrepreneur Center, such as Project Music, 1440 and the soon to launch Project Healthcare focus on music technology, publishing and healthcare, respectively.
Can I communicate with the entrepreneurs?
Yes. You will have access to the contact information for each entrepreneur in your group. You are welcome to get in touch with the entrepreneur to learn more about them, their company and to inquire about investing further.
InCrowd also encourages personal interaction between angels and entrepreneurs, which is why our angel program is designed around specific institutions. In this case, if you would like to go to the Nashville Entrepreneur Center and meet the companies in the program, please do so (Jumpstart Foundry companies are also located in the Nashville Entrepreneur Center location).
Does InCrowd plan any events for investors to interact with the entrepreneurs and ask them questions?
Every month, InCrowd hosts a pitch day, called InCrowd Member Meals, that will give the entrepreneurs that we list earlier that month a chance to present their ideas to the investors. Only one or two will be listed each month to keep our angels from getting overwhelmed with the scoring system.
At the Member Meals, you have the chance to spend more time with each entrepreneur in person and to make sure all of your questions about the company have been answered.
Member Meals events are only open to members.
Do the entrepreneurs have the contact information for each angel?
No. To protect the privacy of the angels, the entrepreneur will never know who is participating in the group or how to get in touch with them, unless the angels divulge that information on their own.
If I decide I like a company, how do I make a personal investment?
InCrowd provides tools that make it easy for you to invest. We will have terms for our angels negotiated ahead of time or in partnership with experienced lead investors (you can find the terms in each company's online profile), and InCrowd prepares the paperwork to finalize the investments.
When you identify a company you would like to invest in, you can invest in one of two ways: 1) You can invest through an ACH Transfer, or; 2) you can send a check made out to "Nashville MAC Fund I, LLC" with the name of the company you are investing in on the memo line, to the following address:
InCrowd Capital, LLC
41 Peabody St.
Nashville, TN 37210
We will hold the committed funds in a dedicated account until the investment close date or the total investment target is reached, whichever comes first. At that point, all of the funds will be transferred as one group to the entrepreneur. No fees are taken, and every dollar you commit is invested in the company of your choice.
Can I take a more active role with the companies I invest in, such as mentorships and/or board positions?
While there is no obligation to do so, we highly encourage angel investors in our group to take active roles within the companies they invest in. Some options include acting as a mentor to the entrepreneurs you are supporting, offering your own expertise in areas you are interested in, or taking on a board role.
InCrowd's program is designed to make these opportunities available to our investors if they are interested. During the raise process, please feel free to reach out to the entrepreneurs to discuss in more detail.
How long does each pool investment last?
InCrowd's Tennessee investment pool will invest at least $40,000 in each of the companies that are selected by InCrowd, with the assistance of the investment committee. After the pool funds are fully invested across ten to twelve companies, which we expect to take one to two years, you will be notified and will be given the option to invest more in the pool.
After the investments are made, it will likely take several more years before all of the companies in the fund have had exit or liquidity events.
Can I see deal flow from outside of my region?
Yes. The annual fee includes access to our entire network of InCrowd groups - including those in other states. However, for those who only want to see local deals, you easily be able to look past deals outside of your home region.
In addition, you will always have the option to invest in each regions' investment pool outside of your home region to diversify your pool portfolio outside of your home geography. You can add these investments through your account online.
Where are the funds for the pool investments handled?
All funds for the Tennessee investment pool will be placed in a dedicated account at Avenue Bank.
Who is handling the legal aspects of the group?
InCrowd has retained Baker Donelson as our legal advisers.