Objective

Next Wave Impact has launched an investor syndicate on AngelList, which is a seed/angel focused syndicate formed in late 2017. Similar to Next Wave Impact's early stage impact fund, the goal of Next Wave Impact Syndicate is to facilitate investment opportunities in impact companies that have potential for high growth, high impact, and financial return. Via the Next Wave Impact Syndicate, investors that are not within the Next Wave Impact Fund, or Next Wave Impact Fund investors who are keen to increase their investments in specific companies, have the opportunities to do so collectively.

Deal flow

The deal flow will be primarily from Next Wave's network including: Investors' Circle, Toniic, Pipeline Angels, Golden Seeds, Astia Angels, JumpFund, Rockies Venture Club, 37 Angels, ACA's impact collaborative, as well as members of the Glass Wall Syndicate, which is made up of funds and trusts such as Stray Dog Ventures, New Crop Capital, and VegInvest, and individual angel investors and family offices.

Selection Criteria

Companies syndicated amongst the Next Wave Impact syndication may not necessarily be Next Wave Impact Fund investments. Investments by Next Wave US Impact Fund (NWIF) are approved by the investment committee of the NWIFs. Whereas companies syndicated by Next Wave Impact syndicate are determined by the Next Wave's syndication committee and network. The syndication committee will primarily focus on the following:

• Ensuring the social/environmental impact is core to the companies’ business models and clearly define it for each company
• There is sufficient existing interest amongst Next Wave's syndicate members to proceed with a collective investment

Lastly, the decision to invest rest upon individual angels for each deal. As such, each angel should complete the necessary due diligence for each company themselves, and be mindful of risks involved in angel investing.

Investment Company Characteristics:

• Sustainable Competitive Advantage: Competitive advantages can include high barriers to entry (if no IP, then trade secrets that can allow a reasonable amount of time to become market leader), disruptive technology, etc. Company should foresee creating some type of unique marketing position.
• Strong, Well-Balanced Management Team: Should include knowledge of the industry, their product and competitor’s product as well as an understanding of where their product fits in the future trending of their industry. Should have enthusiasm and ability to execute their plan.
• Strong preference for serial entrepreneurs who have successfully exited in the past, are coachable and communicate well with their investors
• Market Opportunity: The market ideally would have room for growth and offer opportunity to capitalize on attractive industry trends.
• Balanced and diverse growth strategy which addresses both vertical as well as horizontal growth.
• Product/Service Differentiation (No “Me-too” companies)
• Has a Plan B as well as Plan A, in addition to a clear exit strategy (or, in cases of alternative financing vehicles, a clear path to repayment of investment + return).

Sector/Industry/Geography:
• Our investments will focus on firms that have a significant positive impact on people, communities, and the planet.
• We are interested in companies that have shown traction in solving a large-scale problem in education, health, food sustainability, and opportunities in clean / energy saving technology.
• We will typically exclude pharma and medical devices that include FDA approval unless the approval is imminent.
• We should have geographic diversity and a portfolio weighted more heavily to women entrepreneurs, but not necessarily exclusively women-led companies. We’d like to see women and/or people of color on the founding team.

Financial Considerations:
• Valuations: Reasonable valuation for the stage of the entity > should be comparable to market median prices. Unless at a later stage, valuations above $6M should be thoroughly reviewed and have disruptive technology; most early stage company valuations should be between $2 – 5M.
• Funding Ask: Should be in line with their stage of growth
• Our aim is to have investments of 100K to 500K per company.
• Number of expected funding rounds: the company should have looked at this and provided their answer which we can then evaluate as to what amounts of money have to be put aside for follow-on round investing.
• Diversity in terms of Stage of Company – at a minimum, company should have proof of concept. Some companies should be already in the market and selling thus having some revenue. Some investments should be later stage so exits are possible in the near term. Some companies should be quick to cash flow break even, not requiring multiple funding rounds

• We should be syndicating all deals and not be the sole funder. We will aim to syndicate deals through Next Wave's network including: Investors Circle, Toniic, Pipeline Angels, 37 Angels, Golden Seeds, Astia Angels, JumpFund, Rockies Venture Club, etc. as well as members of the Glass Wall Syndicate, which is made up of funds and trusts such as Stray Dog Ventures, New Crop Capital, and VegInvest.

• Our due diligence will focus on ensuring the social/environmental impact is core to the companies’ business models and clearly define it for each company. Early screening can ensure the impact isn’t, but detailed due diligence will need to prove out how the impact mission is core to the company, so ideally that is preserved post-exit. The fund will follow a triple-bottom-line model of investing (people, planet, prosperity).

A few final notes about our investments:

1. We want to see this product in the world. And, as the company grows, we will be glad to be associated with the company and what it’s doing in the world.

2. We seek to find founders that are passionate, know more than we do, are obsessive, and great at hiring, motivating and retaining an incredible team. We want to focus on companies where we can have “involvement with the company” after investment as that is also correlated with better returns.