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