Why Does Lateral Capital Invest Alongside Angel Groups?
Research shows that to be successful over time, Early Stage investors have to make dozens of investments. But since our fund is relatively small, it is impossible to afford the big professional staffs which larger Venture Capital or Private Equity funds typically employ. This is where Angel groups come in.
While most Angel groups are composed of “volunteer investors,” they almost always include highly-skilled, very motivated members – many of them either past corporate executives or former entrepreneurs. Angel groups typically do 60-100 hours of due diligence on deals before they “report out” a decision. They tend to close only 1-5% of deals they see. So when we invest in a company “discovered” by an Angel group or fund, the company has already been through a rigorous due diligence process. We can talk to the members directly and see what they think about a business which is local to their members.