Thank you in advance for considering applying to Central Texas Angel Network (CTAN).
CTAN is one of the largest and most active angel investing groups in the nation with 185 members, and $90 million invested in 150+ companies. We run five formal funding cycles each year. There are a few things we’d like you to consider prior to completing your application. (We also recommend you attend our free Mentor Hours before applying to CTAN.)
CTAN members specifically evaluate companies that fit the following criteria:
- Unique and disruptive – Something truly unique that is not a “me too” type of product or service, and stands out from competition.
- Scalable – Able to grow and expand quickly. We do not fund “lifestyle businesses” or individual franchises.
- Defensible – Either through intellectual property or team skill, the business is defensible from copycats.
Each Funding Cycle is 10 weeks long. Please take a moment to review the structure below:
WEEK 1: Application Deadline & Funding Cycle Forum
Companies apply via ProSeeder, our online platform. Among other questions, entrepreneurs classify their business in one of five industry sectors: B2B Software, B2C Software, Hardware/Other, Life Sciences, or Consumer Products. CTAN members group themselves into Sector Interest Groups (SIGs) based on their interest or expertise in those sectors.
Funding Cycle Forum: This is an exclusive, two-part event for those companies applying to the current funding cycle, which includes 1) a short workshop at which entrepreneurs learn how best to navigate CTAN’s process and pitching to investors, and 2) mentor hours during which entrepreneurs have the opportunity to meet member investors in a speed-dating style format. (NOTE: This is not a pitch event. This is your opportunity to network with and get feedback from member investors.) After this event, you’ll have the weekend to update your application using the investor feedback you received, prior to the following week’s online voting by CTAN members.
WEEK 2: Application Review & Voting
CTAN members review entrepreneur applications and vote online for companies that pique their interest. If enough members in each Sector Interest Group (SIG) express interest in a company, we invite the company to pitch to members of that SIG the following week.
WEEK 3: SIG Screening Meeting
Selected companies pitch in person to each SIG, with time for Q&A with investors. We can accommodate remote pitches upon request, though we do not recommend this. At the end of the SIG Screening Meeting, the members in attendance decide if they are interested enough to move into due diligence, and whether there’s a member willing to be Deal Lead to lead the due diligence effort. If the answer is yes to both questions, then we move into three weeks of pre-due diligence with the company.
WEEK 4: Initial Due Diligence Checklist
Selected companies are tasked with uploading a completed Initial Due Diligence Checklist to their deal room on ProSeeder on Monday. CTAN members review these checklists.
WEEK 5-6: Initial Due Diligence
Selected companies meet with CTAN staff and select members of the SIG for an initial due diligence meeting, in which we work with each company to better understand their business model and value proposition. Members and staff are looking to identify the one or two top questions or concerns they have about your company to help determine whether your company will get an invite to the Showcase Meeting. (Note: These meetings may be remote or in-person.)
WEEK 7: Showcase Meeting
Companies that pass the initial due diligence phase are invited to present to the broader CTAN membership at the Showcase Meeting. Following each company presentation, their Deal Lead leads an investor discussion to build additional interest within the membership.
WEEK 8-9: Full Due Diligence
Selected companies meet with CTAN staff, their Deal Lead, and other members of the SIG for a full due diligence meeting, in which we work with each company to better understand their business model and value proposition. We conduct customer reference calls, competitive analysis, market sizing, team reference calls, etc. (Note: our members prefer in-person due diligence meetings, but we can accommodate remote meetings as well).
WEEK 10: Term Sheet
The member Deal Lead works with the company to arrive at a term sheet. Once a term sheet has been agreed upon, the due diligence findings are made available to members, and we soft-circle interest from the membership. If we are able to soft-circle interest, we begin working with legal counsel to close the deal.
While it’s not a requirement, many CTAN member investors have a preference for Texas-based companies; however, members have funded companies from across the U.S.
CTAN charges an application fee of $250, due prior to submitting your application. Important: CTAN does NOT offer refunds. We recommend you clearly understand the funding cycle process, as well as the pros and cons of applying to an angel group before submitting an application.
The application fee provides you the following:
- An invitation to attend a three-hour Funding Cycle Forum, at which
- an experienced angel investor provides advice on pitching to investors and navigating the CTAN process,
- an entrepreneur who has successfully received funds from CTAN explains the process from his/her point of view, and
- you have an opportunity to meet and network with investors.
- Entry to CTAN’s Funding Cycle where your application will be sent to the 185 investors in our network.
- Feedback on your company and application, if you aren’t voted forward by members to the next step.
- Two attempts in the Funding Cycles of your choosing, if you don’t receive funding on your first attempt. You can return for your second attempt at any time in the future. (We recommend you skip at least one cycle before returning, perhaps more. Ideally, you will demonstrate the milestones and traction you have achieved since your first application.)
If CTAN members invest $200,000 or more in your company, CTAN collects an Administrative Fee of $5,000 upon closing. If CTAN members invest $400,000 or more in your company, CTAN collects an Administrative Fee of $7,500 upon closing.
If you have any questions, please contact Mark Thorsen: mark[at]centraltexasangelnetwork.com. We highly encourage you to take advantage of our free Mentor Hours BEFORE you apply to CTAN.
“It only takes 1…”
It really does only take one interested investor to make a huge difference. While a majority of CTAN-funded companies have progressed through the entire funding cycle, we typically see some additional companies receive funding each cycle which didn’t make it through the entire process. Perhaps the company didn’t receive enough votes, but a handful of members remained intrigued. We do not prevent interested members from conducting due diligence and investing outside of our process; in fact, we encourage it — as long as the company is not moving forward in CTAN’s formal funding cycle. We seek to help as many companies get funded by our member investors as possible.