Below is a general overview on raising seed capital from Newfoundland and Labrador Angel Network. As every case is unique, this outline provides a high-level description of the various stages involved in the NLAN process.
Click here to launch your NLAN Application Form
Step 1: Submitting Your Executive Summary
If you feel that NLAN and potential Angel members could be a partner for your organization, the first step is to submit your contact information and executive summary for a preliminary review. After receiving your non-refundable $250.00 plus HST ($282.50) submission fee made payable to NLAN, we will contact you within ten (10) business days to let you know if we'd like to schedule a meeting or request further information. Companies failing to make such payment will not be considered. The 30-minute meeting will be a preliminary conversation about your idea or product and is meant to establish the merits of pursuing more detailed, serious discussions.
Step 2: Request for Background Information
If Step 1 is successful, we will request a business plan and background material on your service or product and the market. In preparation for Step 3, we want to understand the market need you are addressing, target customer, market dynamics, business model and your competitive advantage.
Step 3: Initial Face-to-Face Meeting
The goal of this meeting is to reach a clear and mutual understanding of your service or product and its potential. Standard questions we may ask at this stage include, but are not limited to:
- What is the product/service and what need does it fulfill?
- What is the business model?
- What is the size of the addressable market
- What are the dynamics of this market?
- What are the key milestones to achieve with this financing
- Which people will execute this plan?
Step 4: Development of Investment Request/Sample Term Sheet Detail
We will analyze the results of the initial face-to-face meeting and business plan to create a sample investment Term Sheet to solicit Angel interest. We focus on several key criteria: the people, the product/service, the market, and a clear understanding of why this is an outstanding investment opportunity and requested.
Step 5: Second Face-to-Face Meeting
If Step 4 results in positive feedback from potential Angel Investors, you and your full management team will be invited to present to select Angel Investors. This meeting is also an opportunity for a wide-ranging exchange of ideas and opinions. This can be a lengthy process depending on how prepared you are and the individual requests of the Angel(s).
Step 6: Detailed Due Diligence
At this stage, NLAN will request that you and your management team complete a detailed checklist. We will verify all facts about your business, perform reference checks and make customer calls, if applicable. This process also involves on-site meetings and interviews.
Step 7: The Term Sheet
Upon satisfactory completion of due diligence we will assist in completing a term sheet. It will contain standard terms and match our discussions to date. A term sheet is a negotiable document and a major milestone in the funding process. At this point, legal counsel will be involved for the final document preparation. In limited situations it is possible that we will issue a term sheet prior to completion of detailed due diligence.
Step 8: Legal Verification
The final step involves documentation and legal due diligence. You and your management team will be required to engage an independent legal advisor to review the terms and agreements on your behalf. It is not unusual for this entire process to take two to three months, or longer, from our initial meeting.
Selection criteria and priority status are based on review of each executive summary and companies are required to substantially meet the following criteria:
- Seeking capital in the range of $100,000 to $1M
- Seed, start-up, high growth potential, high projected growth rate
- Experienced management team
- Sustainable competitive advantage
How to apply to NLAN
Please click here to launch your application. If you have any questions, please contact the Executive Director by phone: 709-726-2961 ext. 103, or fax: 709-726-2056.
