Seed Capital From Angel Investors: Kindra Tatarsky, Director of Operations, Golden Seeds (Part 3)

By guest authors Irina Patterson and Candice Arnold

Irina: Do you have  membership dues for your angel members?

Kindra: Yes. It ranges from $2,000 to $3,000.

Irina: How many members do you have?

Kindra: We have about 146 members.

Irina: Who are your members, usually?

Kindra: They range from CEOs of companies of various sizes – anywhere from Fortune 1,000 companies to Fortune 100 companies – they are cashed-out entrepreneurs, they are serial entrepreneurs, they are heads of divisions within large companies and Wall Street people as well. So, they range from Wall Street financial experts to marketing experts to consumer products experts to lawyers and scientists within the life science sector. We have a real breadth of expertise within our network.

Irina: Are you actively looking for new members?

Kindra: We are, particularly in our Boston, San Francisco, and Philadelphia forums. We are always encouraging new members. They have to be referred by a current member.

Irina: Is New York your anchor forum?

Kindra: New York is our first forum, so it’s the largest. But it’s no more important than our other forums. All of our forums are equally important.

Irina: What are the most important factors you consider when deciding whether to invest in an entrepreneur?

Kindra: At various stages there are various criteria. We’re always looking for a strong entrepreneur. That’s first and foremost. And we’re looking for a scalable business idea that has an addressable market opportunity of $1 billion. We’re looking for companies that have proof of concept, which depends on the sector, but usually it’s customers. We like to see at least two paying customers.

We know from working with a lot of other syndication partners that every group has a due diligence process. Ours can be quite rigorous, and we produce a deal memo at the end of each of our due diligence processes which is a summary and culmination of all the due diligence efforts that we put forth.

Irina: How long does your due diligence usually take?

Kindra: We aim for six to eight weeks, but usually it ends up being somewhere between 8 and 12 weeks, depending on the company and the situation.

Irina: Who usually does the due diligence?

Kindra: The due diligence is member driven. So, the members determine if there’s interest, and they’re the ones who drive the due diligence process. But we have clear guidelines so that our investment process is similar from one deal to the next. We also have a deal director who operates as the project manager for each deal, if you will, and it helps to keep each of the deals on a similar track.

Irina: In the past 12 months, how many investments have you made?

Kindra: We’ve done six. We currently have another three that are imminently closing, so we’ll do at least 10 this year.

Irina: As far as the dollar amount that you invested, what was the range?

Kindra: The total dollar amount that we’ve invested this year is $4.5 million so far.

Irina: Is that the combined amount from your fund investment alongside your angels’ investments?

Kindra: Yes, but I can give you the breakdown of it. We put $1.8 million into new deals – that’s just our members alone. We’ve invested $2.3 million in follow-on deals, so those are our portfolio deals that we invested additional funds in. Our fund has invested $433,000 in total this year between both new deals and follow-on deals.

Irina: And per each investment, what’s the usual amount range?

Kindra: The average has come up over the past several years. We used to be closer to $200,000 and that’s steadily increased. This year, our average investment per deal is about $320,000.

Irina: Do you do small investments? What is your lower-end number?

Kindra: Our minimum investment is $25,000 per individual.

Irina: And your lower end is as a group?

Kindra: Typically, our deals are high end. I’d say the average is $300,000. The lower end can be $100,000 to $150,000, but we aim for $200,000 minimum. Our most recent deal was over $1 million.

So, I would say the range is between $250,000 and $1 million.

Irina: How long does it usually take for a company to receive funding?

Kindra: Between 8 and 12 weeks.

Irina: Do you think in terms of valuation?

Kindra: I would say most deals we see are under $5 million, probably closer to $1.5 million to $3 million. But we have seen companies that are higher. We don’t rule out a company based on valuation alone. The valuation has to match the company and the investment opportunity.

Irina: Do you have an equity range?

Kindra: We like to take less than 30%.

This segment is part 3 in the series : Seed Capital From Angel Investors: Kindra Tatarsky, Director of Operations, Golden Seeds
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