Q. How do I join the WRBA?
A. Membership is easy.
1. WRBA membership is restricted to qualified investors as defined by federal guidelines. In short, you must have a net worth greater than $1M not including your primary residence, or having an annual income of $200K for more than 2 years per investor, or $300K including your spouse.
2. Complete the commitment letter and return to WRBA with dues and one-time membership fee
3. One-time membership is $1,000 with annual renewals of $1,000, with the first year prorated from January
Q. What can I expect as an angel investor in the WRBA?
A. WRBA members receive value in multiple ways.
1. You will have access to vetted opportunities that MWV management team and the WRBA Executive Director have invested considerable time in screening and preparing for investment
2. Members can choose to participate with these ventures as an active investor, providing your expertise and experience to assist in the growth and development of the new venture
3. Members can choose to be a passive investor, accepting the investment recommendations of the WRBA advisory board
4. Receive real-time reports on your investment via Venture 360, our investment tracking software
5. Build your net worth while building your community
Q. Will I be required to invest in all opportunities presented to the WRBA board?
A. No, you are not required to invest in all opportunities, but we strongly recommend that you invest in a broad portfolio of opportunities. Data from national statistics and confirmed by our prior investor group indicates that angels should expect 20% annual return from a broad portfolio of opportunities.
Q. How much will I be expected to invest in each opportunity?
A. WRBA expects its angels to invest a minimum of $10,000 for each investment.
Q. What are my risks with angel investing?
A. Angel investing, like any other investment, has risks, and like all other investments, a diversified portfolio will minimize these risks.
It is also recommended that angel investments be limited to 10 to 15% of your net worth. For a net worth individual $1M, an angel would commit $100,000 to $150,000 over the next 3 to 5 years.
Q. When and how does my money go into an investment?
A. The following process outline the method for actual money transfer.
1. A term sheet is prepared defining the basis of the investment made by the investors and the entrepreneur. This serves as the basis for creation of the investment LLC and its operating agreement, and defines the ownership share the investment LLC is purchasing
2. Each investor will contribute their share into the investment LLC, with the additional fees to cover expenses
Q. What are the additional fees for each investment?
A. Each investment LLC will require 3% to 5% for creation of the LLC, and 2% annual operating costs to cover management, tax preparation, reports and K-1 for tax purposes.
Q. How do I get out of an investment LLC?
A. There are several ways in which a member of an investment LLC can exit.
1. The preferred method for an exit is to have the opportunity be purchased through a merger of acquisition
2. Offer your stake in the investment LLC to:
a. Other members of the investment LLC
b. Other members of the WRBA
c. Third party outside of the angel group
d. The seller and buyer negotiate the price
3. In some cases, an investment will not be successful. In this case, the investment LLC will be dissolved by mutual agreement of its members. The details of this exit will be defined in the operating agreement of each investment LLC and may vary for each investment.
Q. If the investment is purchased or merges with another company, how will I receive my money?
A. When a company merges or is purchased, and the LLC investors are bought out, the proceeds are distributed in the following manner:
1. Closing costs are paid
2. The investor will receive up to 100% of their initial investment
3. The excess will be distributed in the following manner:
a. 85% of the balance will be distributed to the investors in proportion to their ownership
b. 15% will go to the WRBA with further distribution to active investors, mentors, and advisors, based on a predetermined basis
· There are 20 investors in the investment LLC, each with an initial investment of $10,000
· Upon buyout of an investment, the investment LLC yields $2M
· Closing expenses are $10,000
· Investors are paid their initial investment equaling $200,000
· The balance, $1,790,000 is split 85/15
· 85% is distributed to investors, with each receiving $76,075, or approximately 7X return, to be at the discretion of the investor
· The remaining 15% is distributed to MWV for their work and contribution, with a percentage allocated to advisors, mentors, consultants, and other contributors to the growth and success of the entity on a pre-determined basis