Investment Criteria Information

The Criteria You Need to Know

If your company meets all the criteria below, we encourage you to apply for funding from Central Texas Angel Network. We welcome the opportunity to review your application. If your company does not meet these criteria yet, please keep working on it and apply when your company is ready.

Investment Vehicle — You are raising your round via Preferred Equity or capped Convertible Note. CTAN does not invest in uncapped Convertible Notes or alternative investment vehicles, known as SAFE (Simple Agreement for Future Equity) or KISS (Keep It Simple Securities). 

Valuation — Over the past three years, CTAN members have invested in Pre-Seed and Seed deals with an average pre-money valuation of $4.72M, with Pre-Seed typically at a lower valuation than that average. CTAN members have invested in Series A deals with an average pre-money valuation of $11.01M. Based on these averages, your deal should be within a similar range, adjusted for your stage and sector, if applicable.

Management Team — We are interested in companies that are driven by an energetic, talented team of founders and advisers. We particularly look for a track record of successful performance.

Market Opportunity — We invest in ventures that are focused on a large market opportunity with sufficient untapped potential. Your business strategy must reflect a realistic approach to its potential to capture a significant share of your target market.

Proof of Concept — Your venture will have progressed beyond product proof-of-concept to clearly demonstrate its feasibility. Examples of feasibility may include paid pilots or customers.

Proprietary Assets — Your company should be able to demonstrate its key value proposition and competitive advantage. The venture should possess proprietary assets, intellectual property, or processes that distinguish it from its competitors.

Rapid Growth Potential — Your company should have a scalable business design with solid prospects for rapid growth. In particular, your company should have a clear strategy for generating profits and managing revenue sources effectively.

Market Differentiation — We are looking for companies that are working toward compelling and defendable market differentiation. Your company will be focused on developing a strong business presence and establishing clear dominance in your market.

Realistic Financials — You are realistic about your financing plan to fund growth toward profitability. Your venture should have a clear, actionable plan and a feasible forecast of revenue projections, taking into account different conditions to predict likely outcomes.

Exit Strategy — Your company will be open to an exit strategy that provides strong returns, ideally with the potential to return at least 10x to you and your investors. Because early-stage investment has a significant level of risk, our members look for a promising return within a realistic, defined period with a clearly defined exit strategy.