Angel behaviour – what should we expect?

Growing the business of angel investment in New Zealand is largely a result of “member get member” referrals. This is true when it comes to attracting new members to the networks and it’s true when it comes to sourcing new investors for our early stage funds.

So as we head into a new year, with lots of exciting opportunities looking for our support, a reminder about the standards of behaviour we should we expect of each other seemed a good idea.

A year or so ago, the Angel Association’s members wrote a Code of Conduct which sets out these standards.

Our values

We agreed the following values are important to us:

  • To be passionately ambitious for angel ventures,
  • To be collaborative and collegial, and
  • To act with integrity and honesty.

Our expectations of behaviour

These values are reflected in how we should behave.

One of the most fundamental components of success in the angel world is speed. So we have made it clear that communicating quickly and clearly is vital.

We also put great store on ‘doing what you say you are going to do’; keeping promises and commitments. If you commit to invest or offer to make an introduction – do it. If said you would sign a document – do it. Of course this isn’t always possible – we all know “life” happens – so if something does get in the way of you doing what you said you would, communicate!

Integrity is everything in angel investment which is why we highlighted respecting confidentiality and disclosing conflicts of interest.

We also expect professionalism. Dealing professionally with each other sets the standards we expect of the ventures we invest in as they grow into world-beating enterprises. Time and energy can be scarce resources in angel investment. This can make it challenging to operate at the levels of professionalism we are used to in other parts of our lives. It’s nevertheless important to ensure timely reporting, compliance with relevant legislation and good businesses practice.

So these are the principles which serve as the foundation for our dealings with each other and are the standards others working with us – incubators, accelerators and professional service providers -should expect.

What does this look like in practice?

The deals

Founders seeking angel investment should know that our members are looking for a credible entrepreneur with aspirations to grow an international business with a well defined product, customer and market. Founders should expect prompt, objective and constructive guidance from our members, whether or not they ultimately secure capital.

Doing the deal – syndicating, due diligence and closing

Any deal approved for presentation by one of our members will meet required standards of presentation in terms of content and performance to pitch to any of our investors. And if other AANZ members are approached to take part in that deal, they have made it clear they will do their best to disseminate that opportunity as quickly as possible. In fact if a deal has been approved for presentation by one of our members, it can only be declined for presenting to another of our members if it lacks alignment with their investor’s preferences or their fund’s portfolio strategy, but not for lack of investment readiness.

We all know the quality of due diligence has an impact on the success of a venture so our members support the use of DD checklists. We recognize the balance to be struck between thoroughness and timeliness. Our Code of Conduct notes that all investors must make their own assessment of any deal and we make it clear no one should place any reliance on satisfactory completion of DD by one of our members as a sign of the ability or future success of a venture and nor does anyone relying on any  member’s due diligence report have any recourse against that members.

Finally, once the screeds of documentation are completed we expect angels to respond to any final communication as quickly as possible and do their very best to secure relevant signatures.

Industry promotion

The world needs more angels so the last word in our Code of Conduct encourages our members to be “ev-angel-ists” for the space. You can expect our support if you need any help spreading the word about the benefits of angel investment. Do let us know if there is anything we can do!

Suse Reynolds

Executive Director

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