Business angels and angel investment networks - the cooperative superpower

Angel investing can be a lonely business. Angel investor is solely responsible for the decision to invest some of their available resources, monetary or in-kind, to help build a successful business. Hence the homework, as well as the consequences, lay on them alone.

Yet there is no other phase in the company’s lifespan when cooperation is as crucial as during the early stages. Angel investing in its core is best done as a team effort. For the company, investment from a group of angels (a syndicate) brings more potential to harvest the varied knowledge and industry expertise of angels. The angel investor, on the other hand, benefits from increased chances of providing sufficient funds for the company to achieve their next milestones and from diversification of their portfolio by investing less but in more companies as opposed to “putting all eggs in one basket”. Of course, individual investment strategies can vary significantly between angels and this is only one of the approaches, but here at Dealum we truly believe cooperation is the key towards a more active and thriving early-stage investing ecosystem.

Nordics & Baltics angel investment scenes are dominated by the presence of nation-wide non-profit associations acting as umbrella organisations with high member count and visibility. In addition, there are smaller groups and organisations focusing on specific regions, sectors, or segments.

We were curious about these business angel networks (BANs) and wondered how do they see their role and purpose in the ecosystem so we reviewed their mission statements one by one to see if angel groups in the region share our vision of borderless cooperation for the benefit of companies and investors alike.

The results are heartwarming. As expected, “network” in the organisation’s name defines the focus and value offering. Cooperation, connecting, and linking are prominently listed in the mission statements of BANs. But it doesn’t stop there - networks consider themselves as a crucial part of the early-stage investment ecosystem and take it up a notch to advance said ecosystem further. They encourage and support individuals on their path of becoming angel investors, improve the quality of investing, create more possibilities for companies and investors, work on a local and national level to create a supportive legislative framework, and drive the growing visibility of the early growth and seed capital’s role in the society. All of this with one goal in mind - to help startup companies succeed in their ventures.

Our two favourite (and coincidentally also the shortest) mission statements are from FiBAN and Keystones. The former declares they are here to “Inspire private investments” and the latter to “Make entrepreneurship a popular sport” (rough translation, courtesy of Google Translate). What a great way of saying all of the above with only a few words!

There’s no surprise that in the light of the mission BANs are on, we have worked out a set of tools to help them achieve their goals in a more efficient way. With the introduction of cross-group syndication tool - the funding round - business angel networks have a more convenient way of connecting with other groups to share knowledge, experience, and deals. Numerous Nordic and Baltic BANs are already using the Dealum platform so there is no easier way to reach out to thy neighbour and propose a joint venture.

For a reference, here are some of the national angel networks in the region you could consider cooperating with on the Dealum platform:

• DanBAN, national network of Denmark
• Keystones, the largest Danish network with ~450 members
• FiBAN, national network of Finland
• EstBAN, Estonian national network
• LatBAN, Latvian national network
• LitBAN, Lithuanian national network

Nordic Business Angel Network has done a wonderful job of creating a snapshot of all the angel groups, events and activity in the Nordics and Baltics on their website. We encourage you to check it out if interested in more details - the statistics are from November 2018, but the scene doesn’t change rapidly and it’s still a great source for the related data.

As cooperation becomes increasingly crucial in the connected world, we are excited to see national networks opening up and sharing their deal flow with partners. We will be sharing some great case studies on this matter in the future. But while we work on writing these down, you can already make new friends on the Dealum platform!