Investors

a forum for investors to find high potential start ups.

What is an “angel”?

Angel investors are individuals who invest in start-ups and early stage companies using a high-risk, high-return matrix. They are usually successful executives who also have a wealth of experience and contacts that can greatly benefit entrepreneurs. Angels get their name because they step in when a start-up is in most dire need of capital and help. Angels do faster due diligence, negotiate less onerous terms, take more risk, and rarely seek majority. This makes them very attractive to entrepreneurs as an early stage option for raising capital.

Who are Cairo Angels?

The Cairo Angels is made up of around 50 members, almost all Egyptian, of whom 20% are women, and more than half are founders of highly recognised brands. Our network deliberately does not include companies, institutions or funds; it is the intention that angels invest their personal money and leverage their experience and network to benefit the business.

Angel investing

A majority of start-ups fail within the first five years of their operations. This makes the job of angel investors even more important. Apart from investing funds, most angels provide pro-active advice, industry connections, and mentoring to founders. The goal is to create great companies by indulging in value creation, while at the same-time providing the investors with high return on investment.

Angel investors typically invest in a portfolio of companies to diversify their risk and increase the odds of picking a ‘winner’. They are actively engaged with their portfolio, including sitting on corporate boards, providing advice and mentoring, and connecting entrepreneurs to prospective clients, strategic partners and potential acquirers.


Return on investment

We target companies that have the potential to return 3 – 5 times our investment in 3 – 5 years (“three to five, in three to five”), though we firmly believe that ten times return is achievable in the Egyptian market.

Egypt has a low cost base, wealth of underserved opportunities, talented and capable youth, and lack of competition. Together these produce a potential for substantial returns. here

How we work

CairoAngels convenes once a quarter to review 4 to 5 business pitches; meetings are open to members only. Afterwards interested angels are invited to engage directly with founders to carry out due diligence, negotiate investment terms and finalise legal documents. A substantial time commitment is made by investors to close a round of funding.

Angels invest their personal money, in return for an equity stake in the business. Often a handful of angels will cooperate on a deal to share experience and due diligence workload.

CairoAngels deals stems from a variety of sources. Egypt’s incubators, accelerators and universities perform an invaluable function in terms of hosting business plan competitions and preparing aspiring entrepreneurs for the realities of running a business. However we are pleased to see that an increasing portion of our pipeline is coming from direct approaches and often from more mature entrepreneurs. We are keen for this trend to continue.

We are also proud to be reaching outside of Egypt and are starting to find interesting projects in Jordan, Lebanon, Yemen and hopefully soon further afield.


Common investment terminology

Prototype: this refers to the first version of entrepreneur’s product that will be tested with potential future customers.
Beta version: this refers to the stage of maturity of the product. The Beta version has been modified after an initial round of market testing, and is usually ready to go to market.
Seed round: the first round of third party financing an entrepreneur will seek to arrive at a prototype
Series A: the second round of financing to reach commercial launch or go to market.
Valuation: the process of determining the current market worth of a company.
Pre-Money Valuation: the value put on a company before raising capital.
Post-Money Valuation: the value of the company after it has raised capital (simply, the pre-money valuation plus the capital raised).
Convertible note: you can invest in a company without immediately taking equity. A convertible note is a loan (interest or non interest bearing) extended to the company with an understanding that once the entrepreneur raises a subsequent round of financing, you will convert your loan to equity at a slightly favourable valuation to that agreed with the latest investor.
Drag Along Rights: the right of one shareholder to obligate other shareholders to join in selling their shares if they are presented with an attractive sale (‘exit’) opportunity
Tag Along Right: a right reserved by all shareholders to join a sale opportunity if it is presented to any one shareholder

Think you’re an angel?

If you’re curious about becoming a Cairo Angel but not sure whether it’s right for you, try asking yourself these questions:

  • Do I have the business experience to advise an entrepreneur?
  • Do I have industry connections that can benefit a start-up?
  • Can I comfortably invest at least LE 100,000 in a risky growth company?
  • Do I have the time to participate in due diligence, negotiations, or sit on a Board?
  • Do I find it exciting to pick investment ‘winners’ and assess aspiring entrepreneurs?

The typical profile of our angels is as follows:

  • Business Owners
  • Experienced entrepreneurs
  • Experienced angel investors
  • High Net Worth Individuals
  • Current or former high ranking executives

Prefer investing silently?

If you would like to invest in Egyptian or regional start-ups but live outside of Egypt or cannot make the time commitment, we are in the process of developing a product for you. During the second half of 2013 we will be launching a side-car vehicle whose purpose will be to invest in CairoAngels pipeline alongside our members and at the exact same terms. In this way you can access the same investment and diversification opportunity of our fully active angels who are ‘in the room’, plus you get the benefit of their due diligence and negotiations.

If you are interested to invest in this vehicle please register your interest, email us at info@cairoangels.com so we can contact you when the product is ready for launch.

Code of Conduct

Members of CairoAngels will not share material received from founders with third parties, nor discuss their companies or ideas outside of the network. Where angels’ business interests conflict with a start-up’s, angels will not attempt to hinder the entrepreneur’s success or provide false information that would serve to undermine the business. During pitch sessions members will arrive on time, they will not interrupt presentations other than for clarification, and will not try to influence the opinion of other investors. Furthermore angels will negotiate in good faith and with integrity, always seeking an alignment of interest with the entrepreneur.

In return we ask that entrepreneurs come prepared to our sessions, negotiate in good faith with interested investors, and respect negotiations with members of CairoAngels. This means that founders will not negotiate with other parties so long as they are negotiating with us, and that do not unreasonably change the terms of an agreement.