Imagine if there was a way you could educate, teach, train, engage and network your local angel network all at once. Well, there is. After 15 months of active pilots worldwide, we are thrilled to introduce the Strategy Tools Business Angel Masterclass. The goal? Greatly improve the growth and development of your angel network!
What is the Business Angel Masterclass?
The Business Angel Masterclass is a highly engaging, competitive, action-based Masterclass for angel investors and anyone working in the angel network’s wider ecosystem. It runs over 3 days (with a reduced option of 2 days), taking people through the entire startup journey from the idea stage, angel investments, long-term collaboration and eventually exit. The 3-day program perfectly mirrors real-life angel investing and the various decisions both founders and angel investors need to make as they go through the founder’s journey together. During the journey, participants work in both teams and networks to solve specific challenges at each stage. Problem-solution, product-market fit, financing, investor readiness, and business model, these are all challenges teams must work to overcome.
What happens in the Business Angel Masterclass?
In the Masterclass, people are split into two groups; founders (few) and angel investors (many). The founders will aim to build a startup, via 100’s decisions on team, product, beachhead markets, compensation models, fundraising, revenue growth and more. Ideally, the founders are able to scale the company through 10-15 funding rounds (equity, debt, grants) and deliver a stunning exit at the end; without running out of cash and going bust along the way. The angels will meet, review, and invest in a single (concentration risk) or a portfolio of startups, and then support them actively throughout the journey. Just like in real life, different angel investors will choose different strategies, from few investments to many, and passive to active ownership. The experience is designed in a way where the angels if they choose to be active and supportive, can have an outsized impact on the long-term value and growth of the startups, but they may not recognize this in the beginning….
Along the way, teams will be competing in some areas and (being forced to) collaborate in others. This dynamic, reflecting real life startup ecosystems, makes the experience both collaborative and ultra-competitive at the same time.
What does the program look like?
After several pilots, we have structured the 3-day program in three phases.
First, on day 1, we teach the basic building blocks of angel investing. This is a one-way, lecture format, covering all key concepts in depth. Strategy, portfolio risks, active vs. passive, investment structure (equity, convertible, SAFE), follow-on investing, downside protection, investing in networks and more. At this stage, the Angel Investor Toolkit is also provided, giving the participants a rich workbook of tools and canvases they will be using during the 3-day program.
Next, we break people into two categories (founders and angel investors) and then split them into teams. This is the beginning of the Scale Up Angel simulation, where participants are working in teams to build and scale startups. Effectively, they now need to apply the learnings we just covered that morning. Over the next 48 hours, people will be largely working in teams, interspersed with short teaching sessions on topics like startup boards, analyzing complex term sheets, structuring late-stage funding rounds, outcome analysis, growth strategy and more. As the teams compete and collaborate during days 1,2 and 3, time tends to fly very, very quickly, and a common feedback has been “Wow, where did the time go”.
At the wrap-up of the team-based format, using the simulation at lunch on day 3, we conclude much of the learning for the first 2,5 days. The final half-day session, after lunch on day 3, is spent working in small groups, on your own personal angel strategy and how to develop the angel network. Core concepts like angel network maturity, dealflow platform, deal leads and more are discussed and worked on. Closing out the final day, participants will leave with a deeper understanding of their own angel strategy, a rich toolkit to support them and a clear plan for how to develop their angel network over the coming 12-18 months.
Why we created the Business Angel Masterclass
The Business Angel Masterclass was created based on insights from angel investors, investor clubs and angel networks around the world. Meeting with innovation agencies, ministries, and ecosystem development builders, we learned that there was a clear gap in how to effectively teach and train emerging angel investors – and at the same time build the social ties and trust between old and new angels in the network. Working with a single client in Europe, we had a hypothesis that a multi-day, highly immersive learning experience, with rich case content, visual tools and working in teams would solve a lot of the challenges angel ecosystems were facing. Sure, we can all read the top-angel books, but that won’t drive much learning. Yes, we can all just get started on making first investments, but we believed an experiential learning format, mixed with rich content and details on cap tables, term sheets, shareholder agreements and late-stage financing would be a far more effective way to teach and train angel investors.
Our first pilot validated this hypothesis. Our second pilot proved our key points and our third and fourth pilots really helped us understand just how effective and impactful an immersive angel masterclass could be.
Who we created the Masterclass for (five user personas)
In developing the Masterclass, we had five unique personas in mind.
The emerging angel investors – zero investments made
The emerging angel investor will learn all the key building blocks she needs to get started. Often, it is a question of confidence and finding a network of like-minded co-investors. We have seen many of these step up and shine in the Masterclass, often leaving with a desire to get started and started quickly.
The new, but passive angel investors – 1-3 investments made
Some new angels have started making investments, they have the basic knowledge and skills, but they often lack the social network and trusted co-investors to be working with. We have found that this group thrives on the collaborative aspect and quickly identifies people they can be working and investing more actively with.
The quickly learning angel investors – 3-10 investments made
The quickly learning angel investors have made multiple investments, building a portfolio and often already started working with the founders. But, in our experience, this angel usually does not have much experience with what happens next. With a limited understanding of the next funding rounds, revenue growth, later-stage term sheets, dilution and more, this angel will often be surprised – even shocked – to learn what comes next. We think it is wise to learn this in a Masterclass, not in real life.
The ecosystem builder
To our surprise, we have found many ecosystem builders benefitting greatly from the angel masterclasses. Innovation agencies, government officials, incubator managers, bankers and more, these people may not invest their own money (at this stage), but they are hugely important to the development of local and national angel networks, and as such, truly benefit from the learning experience.
The angel network champions and leaders
Finally, our core user persona is the handful of angel network champions, leaders and builders. These are the people that actually drive the development, formation and expansion of the angel network. They secure financing from public sources and sponsors. They bring in the startup deals. They host the events. They plan for training sessions. In short, they are the battery that powers the machine. We have found these to love the engaging nature of the Masterclass, and seeing huge short- and long-term benefit from the Masterclass.
Why angel networks should pay attention
Having worked with and taught at angel networks globally, we have seen first-hand how angel networks onboard, upskill and develop their members. We firmly believe that angel networks can greatly benefit from running Business Angel Masterclasses, both teaching and training but also building the social fabric of the network, leading to more active co-investments in the future. In short, angel networks can benefit significantly from running the Business Angel Masterclass.
What angel investors will take away from the Masterclass
For angel investors, the experience will quickly and clearly teach a few core concepts:
- Deal flow and assessment (how to review deals)
- Portfolio construction and investments (how to make investments)
- Working alone or working with others (the benefits of investing in networks)
- Understanding pre- and post-money valuation (price per share, round structures)
- Mark-ups, follow-on rounds and dilution (what happens post your investment)
- Cap table management (the importance of keeping things clean and updated)
- The impact of advisor shares, ESOPs, incentive programs
- Easy and complex term sheets, and how they impact the company and your angel investment
- The risks associated with preference shares and liquidation preferences
- Understanding dilution vs. value increase over multiple rounds
- Understanding exits and how liquidity is generated back to angel investors
Very advanced angels will most likely already have seen most of these concepts in practice. Still, for the large majority of angel investors and anyone who got started investing within the last 3-4 years, it is very unlikely they have seen all of these things in practice already. The Masterclass experience allows them to work through term sheets, master cap table math, understand dilution and better position them to coach founders on these issues.
Next location, MENA
We are honoured to have been able to run a number of Business Angel Masterclasses around the world already, constantly testing out and iterating on content, exercises and group work. Next month we will be back in the thriving MENA region to run our next Scale Up Angel Masterclass. Here, we expect to meet 40+ engaged, energized and active angel investors, all striving to become better angels, for both ecosystem impact and financial returns.
Looking ahead
Looking ahead, over the next 24 months, we aim to deliver 10+ Scale Up Angel Masterclasses globally. Places like Canada, Denmark, The Gulf States, Panama, Singapore, UAE and Eastern Europe have all expressed significant interest to host and run the Masterclass. Despite having very different starting points, their desired outcomes are all the same, boosting the local and national angel investor ecosystem. If successful, that should help us accelerate and energize 300 – 600 angel investors globally, in turn impacting 1000’s of startup founders with a renewed insight and expertise.
Want to know more?
See how Tiye Angels & Strategy Tools are transforming Egypt’s investment landscape by empowering female angel investors
Do you want to bring the Scale Up Angel Masterclass to your region? Read more here or talk to our team.
Strategy & transformation advisor to companies, innovation clusters, ecosystems and governments around the world.
