We look for teams of high-quality entrepreneurs with a track record of leadership and performance – either in the company’s specific industry or in prior entrepreneurial ventures. We also look at the team’s passion for and commitment to the new business idea, and its ability to inspire confidence among future stakeholders, including employees, potential customers, and investors. As we will be working together as partners, the team’s credibility is essential. In addition, the team must be open to and comfortable with receiving input provided by angel investors.
The company must have some proprietary features that distinguish it from potential competitors or provide barriers to entry that prevent other companies from capturing customers with a similar offering. Attributes that convey competitive advantage include intellectual property protection, exclusive licenses, exclusive marketing and distribution relationships, strong brands, scarce human resources (i.e. knowledge and skills), and access to scarce raw materials.
Most Karaya deals have pre-money valuations that are below $1.5 million. The majority of our deal valuations are in the $300,000 to $600,000 range. A key reason for this is that it gives the investor the potential for a nice return at a modest exit valuation. It also allows for some protection against future round dilution. It is in the entrepreneur’s best interest to have the valuations of subsequent rounds increasing and avoiding bad will and anti-dilution ratchets.
Our members typically seek returns of at least five times their initial investment, within five years. This level of return on investment is essential due to the high risk and likelihood of failure among early stage ventures. Thus, a clearly articulated exit strategy – how angel investors will extract such returns – is essential. For example, do you plan to sell the company to an established corporation in your industry? Or will the exit be through subsequent rounds of financing – venture capital or the public markets? Angel investors are not just interested in the strategy, but more importantly in the how – the operational strategy that shows specific steps that will be taken to achieve the exit.
We invest in solutions that address major problems for significantly large addressable target markets (i.e. a $5+ million market). The company must demonstrate a strategy to claim a reasonable share of this market.
We are looking for well thought out and reasonable revenue plans. Most financial plans do not achieve their revenue projections, so we will evaluate plans under the assumption of a revenue shortfall. Consequently, gross margin and cash positions are critical variables to manage.
We look for companies that can grow quickly and manage the scale necessary to succeed. The company must demonstrate a plan to generate significant profits beyond the initial product idea. Is there a strategy to achieve multiple sources of revenue?
Use of proceeds
Funds must be used to accelerate the company’s achievement of key milestones that increase the company’s value. We often fund activities that include research and product development, building a sales and marketing infrastructure and hiring key executives.
Karaya Angel Investors Group,
is a unique hub for raising smart money which includes capital, guidance, counselling and relations.
Our Vision is becoming the largest and most active angel group in Iran for the development of entrepreneurship and wealth creation in the country.
To create a good and effective relationship between entrepreneurs and investors for economic development and promotion of entrepreneurship in Iran, we hereby commit ourselves to support the entrepreneurs and attract investors to reach economic growth and wealth creation.
We are an angel investor group, interested to fund the startups.
We have the expertise and network to help entrepreneurs and startups.
Karaya brings connections, knowledge and mentoring.
Investors may participate in funding the startups by grouping and syndication as per their discretion.