Angel groups sometimes seem like secret societies. How do you find them? Do you have to be invited or know someone to become a member? Is there some sort of secret “angel rush”? Is there a secret handshake? Hyde Park Angels doesn’t want to be a secret society. We post the names of our angels on our web site.
HPA has a transparent process to become an angel. Request a membership form, and submit it. The Membership Committee will go over it and give you an answer in a timely manner. There is a $500 non-refundable fee to file an application. You have to meet some basic standards. The principle one being that you meet the criteria for “accredited investor” that the federal government sets up. We have our internal standards too. We ask that you commit to investing up to $250,000 over a 5 year period in any of our deals. It helps to have some entrepreneurial experience, or previous investing experience. That is pretty much it. HPA might ask you some questions, but we make the process as painless as possible. Dues are $1000 dollars per year. Does a process get any simpler?
There are some misconceptions out there about HPA and our angels that should be cleared up. First of all, you don’t have to be a University of Chicago grad, or Booth grad to be an angel with HPA. We joke that our Executive Director, Sam Guren, went to the “vocational school out east”! He went to another great school, Wharton. Sam is a textbook example of a great angel investor that joined HPA, but has no degreed tie to the University. HPA members went many places to school. You don’t necessarily have to be a college graduate to be an angel! You don’t even have to live in Chicago. The important thing is that you qualify, and want to invest and mentor start ups.
Another misconception is that we only invest in University of Chicago deals. We invest in everything. Our only real restriction is that we want to invest in midwestern companies. By limiting our geographical reach, we feel we can have the most impact. We have interacted with entrepreneurs from virtually every state in the midwest so far. If you are an entrepreneur thinking about where to base your company, we can help you weigh the pros and cons of being in the midwest. Just a tip, the weather isn’t as nice as some places-but the airports and restaurants are better!
This brings up another point. Just because we are associated with a university doesn’t mean we don’t like to make money! We love our relationship with the University of Chicago. Our color scheme is maroon. We are proud of our Booth School ties, but HPA invests for profit. Our interests are aligned with the entrepreneur. If we make money, they will make money. HPA is not structured as a charity vehicle, and it’s not a fund raising arm for the University. Many of us do give back to the Booth Graduate School, or the Polsky Center, but you aren’t required to. We do work with many young entrepreneurs that recently graduated from, or are in business school-or even undergraduates. Some pretty cutting edge ideas come out of school sometimes and we want to invest in them. Microsoft and Facebook are two examples of businesses that started while the entrepreneur was in college. We love ideas, and students are fountains for ideas.
As far as investments go, as of today, we don’t have a dedicated fund. Each individual angel decides if they want to invest in a deal. Then they decide how much capital they want to invest. Each angel invests on the same terms as any other angel in any one particular deal. The amount of risk you take is up to you. Each investment is a separate investment into a company. Today, we have six portfolio companies that we have invested in. All of them are still in business and we encourage you to visit their web sites. If you are so inclined, order some products from them!
Currently, HPA meets formally 4 times a year. We have smaller groups that meet more often. Many times, we will meet virtually using the internet, telephone, or any way we can connect efficiently. Being an angel does take a small time commitment, but good things always take some time commitment. You determine how involved you will get. It’s a very fluid, entrepreneurial organization. If you look at our roster of angels, you will see a pretty diverse group. All kinds of industries are represented. We have all ages, races, creeds, colors and both sexes. If you are a person that is interested in investing in start ups, you’ll fit in our group! Drop us a line at firstname.lastname@example.org.