Angel activity in the Triangle is expected to increase, according to panelists at CED’s Angel Workshop earlier this week. But an increase in deal making doesn’t ensure every startup will land backing.

Only those who are prepared for a variety of reviews and have plenty of documentation about their business plans can expect to create traction among deal makers.

More than 30 angel investors attended the workshop session to share their advice for startups and also to discuss how they can work better together in growing the Triangle angle market.

“This is important,” said panelist Michael Dial, associate partner at Hatteras Venture Parnters, referring to the increase in angel activity in the Triangle, because there has “been a decrease of venture capital activity.”

The panel also included Jeremy Mario, principal at Mario Family Partners, Merrette Moore, managing partner at Lookout Capital, and Michael F. Noël, founding partner at Acorn Innovestments. The moderator was Troy Knauss, executive director of the Angel Resource Institute, and the subject was due diligence.

The purpose of the event was “to establish common language and common tools within the angel community,” said Elaine Bolle, an angel investor representing RTP Capital. It “is really important,” said Bolle, because there “are more deals moving through the due diligence process.”

What do entrepreneurs need to prepare in order to be considered by an angel syndicate or angel group? According to the materials provided by CED and the Angel Resource Institute, here’s a checklist of important documents entrepreneurs must have:

  • Executive summary, business plan, and slide deck
  • Current balance sheet, description of financial model, and organization chart
  • Sales pipeline and customer list, with contact information for customer reference checks
  • Stock option grants, capitalization table and shareholder roster

According to panelists, you can also expect investors to ask for social security numbers, in order to perform background and credit checks, and contact information for all directors, advisors, and service providers.

Entrepreneurs will impress angel investors if they have a deep understanding of their target market, an established revenue stream and an exit strategy for the business, said panelists.

Angel investors are seeing more and more Triangle companies prepared and ready for investment, said Bolle.

“Doing workshops together makes sense,” said Bolle, because it establishes a common set of processes across all angel investors and groups in the Triangle.

Multiple Triangle-based angel groups were among the 35 people in attendance. In addition to RTP Capital, IMAF-RTP, Piedmont Angel Network (PAN) and Triangle Angel Partners were represented. Snapshots of each:

  • RTP Capital formed in 2010 with four local angel investors. Since, it has increased to 35 members and seeks to expand to 75 active angel investors located in and around the Triangle.
  • Triangle Angel Partners formed in late 2010, with a membership of 40 Triangle-based angel investors. The group invests specifically in high-technology and life science startups based in the Triangle.
  • IMAF-RTP (Inception Micro Angel Fund – Research Triangle Park) is a member-managed seed angel funding group that invests in early-stage companies in North and South Carolina and in Virginia.
  • Piedmont Angel Network (PAN) invests in the Triad and Triangle regions of North Carolina, as well as selected areas in South Carolina and Virginia. Formed in 2002, the group focuses specifically on early-stage life science, technology, software and advanced material companies. 

Jan Davis, representing Triangle Angel Partners, sat next to Bolle for the session.

Both investors moved to the Triangle three years ago, after careers as entrepreneurs and in the high technology industries in Chicago and Silicon Valley.

It was easy to plug into the entrepreneurial community in the Triangle, said Davis.

“I was fortunate to find TAP [Triangle Angel Partners],” said Davis, expressing her excitement at the growing entrepreneurial economy in the Triangle.

In addition to the growing number of startups, Davis described an increased interest in investing in the Triangle’s early-stage companies from new and experienced angel investors based in the area.

“We are picking up the pace,” said Davis. Triangle Angel Partners just closed their third investment, Davis said, “and have three more deals undergoing due diligence.”

“The goal is to average one deal per quarter,” said Davis.