A new Israeli company is seeking to create innovation in the crowdfunding venture capital sector by offering a model for investing small amounts in start-ups while still relying on experts. iAngels enables ordinary people to invest small amounts as part of a larger group, to create a better common value on the investment. iAngles picks the potential start-ups for investment, subject to recommendations from leading private investors it works with and who have pledged their own investments.
Two women entrepreneurs, who complement each other's financial and technical expertise are behind iAngels: Mor Assia, who held strategy associate positions at SAP, IBM, and Amdocs; and Shelly Hod-Moyal, a former investment banker at Goldman Sachs in Israel, research analyst at Avenue Capital, and financial adviser at UBS. They met and began working together in New York.
Assia and Hod-Moyal are also familiar with entrepreneurship through their husbands: Assia's husband Yoni Assia is a founder and the CEO of eToro Inc., a social network for financial investment; and Hod-Moyal's husband, Kfir Moyal, is a co-founder and general partner of Cyhawk Ventures and a co-founder of Matomy Media Group Inc., which is set to hold an IPO within weeks.
"Via the Internet, we provide access to transactions by leading angels. You know that they are investing their own money, so there is someone protecting your interests in the start-up," says Assia.
"To really invest, you need to know what's there from the outside," says Hod-Moyal. "The angels we work with see the market, and when they invest in something, it's after they've seen 100 start-ups. They invest in a company because they believe in its entrepreneurs and they advise them all along the way."
iAngels works with over 20 private investors, include Tal Barnoach, Moshe Lichtman, Yuval Tal, Rafi Gidron, and Barak Rabinovich. Several big names in the industry have invested in iAngles, including Gigi Levy, Yanki Margalit, Daniel Recanati, Yuval Barahav, and David Assia, Mor Assia's father-in-law.
The minimum investment is $5,000, made by bank transfer, and iAngels company aggregates the investments. "The money is deposited in an escrow account, and when the investment in the company is closed, we transfer the money and sign the investment document. If no deal is reached, the money is returned," says Assia.
Hod-Moyal says that iAngels invests in a company during the advanced stage of negotiations, when there is already a term sheet. "The angel who introduces us has committed to invest at least $100,000 in a start-up that is between the seed and first financing round stages," she says.
Participation in iAngels is subject to investment knowhow by the private investors, as defined by a country's laws. In Israel, an investor must meet two of three criteria: an understanding of capital markets; three transactions per quarter; or NIS 12 million in bank deposits and assets. Hod-Moyal says that up to 35 investors who do not meet these legal criteria may participate in an investment, but toward the closing of a financing round.
People interested in a particular start-up are given access to its data, including valuation, presentations, products, and recent progress. They can also participate in a webinar with the start-up's CEO. Each investors receives a stake in the start-up proportionate to his investment, and has the right to participate in subsequent investments and other conditions.
iAngels has made three investments of $200,000-400,000 each to date.
Under iAngles' business model, Assia and Hod-Moyal collect a 5% commission on each investment to cover legal fees and monitor the investment for 7-9 years. In the event of an exit, iAngels collects a 15% commission on the upside, with the rest going to the investors.
Published by Globes [online], Israel business news - www.globes-online.com - on February 13, 2014
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