Frequently Asked Questions
How do I apply for funding from BlueTree Allied Angels?
The first step is to read our investment criteria. If your company meets our criteria, the next step is to apply for funding on Gust, our online deal management platform, by clicking here. Your application will be reviewed by our Screening Committee. You will receive a response from us in the form of either:
- an invitation to present to our Formal Screening Meeting;
- a decline; or
- a request for more information.
What happens if the application is rejected?
While we attempt to provide feedback to rejected applicants, we receive an overwhelming number of requests each year and we cannot guarantee that feedback will be provided. We receive hundreds of applications each year and have the capacity to fund 8-10 deals; thus, your rejection may be a reflection of membership interest or capacity rather than a negative reflection of your company. Reapplying at a later date is always an option.
What happens if the application is accepted?
If your application is approved for review, you will be invited to present at our monthly Formal Screening Meeting in Pittsburgh. At the meeting you will present to BlueTree’s Formal Screening Committee. You will be given 20 minutes, uninterrupted, to present your investment opportunity and 15 minutes for Q&A. The committee will then determine if you meet the criteria and interest level. You will be notified of the outcome within seven days of the Formal Screening Meeting. If you are declined following the Formal Screening Meeting, feedback will be provided regarding issues of concern. You may be invited to resubmit your application for consideration after changes are made. If you are selected for due diligence, you will be notified of the next steps.
How much time is allocated for presentations at the Screening and Member Meetings?
Presentations at both BlueTree’s Formal Screening Meeting and Member/Investor Meetings follow the same format. You will be given 20 minutes, uninterrupted, to present your investment opportunity, and 15 minutes for Q&A.
What happens at BlueTree’s monthly Member/Investor Meetings?
Prior to the meetings, investors have access to your executive summary and other supporting materials. You will be given 20 minutes to present and 15 minutes for Q&A. The investors will then discuss your presentation and investment opportunity in private and, express a non-binding interest. If an appropriate level of interest is expressed in your investment opportunity, we will proceed to invest.
What happens during the due diligence process?
BlueTree’s due diligence is performed based on National Venture Capital Association (NVCA) best practices, and includes a thorough document review and several meetings with your management team. Following due diligence, a due diligence report is created and emailed to members or presented at a subsequent meeting. Our due diligence process includes the following:
- Document Review – Our due diligence process will begin with you being asked to prepare a standard package documents to upload to Gust, our online deal management platform. Requested documents include financial and legal documents as well as a list of customers, suppliers, contracts, patents, etc.
- Meetings - The Due Diligence Committee will schedule a series of 3-4 meetings to get to know your management team and better understand your business. You should prepare presentations that provide detail on your product, markets, competition, financial projections, cap tables, etc.
- Term Sheet - Either the Due Diligence Committee or another interested investment group outside of BlueTree will present a term sheet and use it as the basis to negotiate the basic valuation and terms of the investment. You may also present a term sheet to begin initial term sheet discussions.
What types of companies does BlueTree invest in?
BlueTree’s portfolio reflects the diversity of its membership. Members invest in companies in a variety of industries and stages of growth. We focus on early stage companies with potential for significant growth and exit potential within 3-5 years.
The group generally does not invest in research and development. Most members are more comfortable with business risk (i.e., how do you attract and retain customers) than technical risk (i.e. will the product work). Thus, companies that have completed initial product development and are executing a plan to address the business risks are more likely to receive investment. Exceptions are sometimes made for strong management teams with prior start-up experience.
What is your preferred investment security?
BlueTree Allied Angels strongly prefers to invest in preferred stock, but will occasionally make exceptions for convertible notes in specific cases. We will not invest in common stock.
Do you invest in companies outside the region?
Only if we syndicate with a local lead investor or if the company is willing to relocate to our region. Successful angel investments often require significant hands-on effort, so we view these investments requiring some level of local support by the investment groups involved.
How long does the process take?
Unfortunately, there is no standard time table for the entire screening and investment process. Areas that tend to take the most time are screening and due diligence.
Screening Meeting FAQ
How many associates can I bring with me?
We request that you limit the number of associates accompanying you at the screening meeting to two other people from your company, unless you prearrange this with management prior to the meeting.
How many participants from BlueTree’s screening committee?
There are usually 12-18 screening committee members in attendance evaluating the company. The screening meeting is also open to individuals looking to learn more about BlueTree’s screening process. Usually there are around 10 of those individuals in attendance as well.
What are the potential outcomes and when will I know the results?
We will get back to the entrepreneurs who present within one week of the screening date with the results of the screening meeting.
Requested Topics To Cover In Presentation
- Initial customers or initial targeted customers
- Financial projections
- Funding—history, this round and future projected rounds
- Exit strategy for your investors
- Possible acquirers and exit multiples
- Management team
- Problem to solve—validate with specifics
- Value proposition
- Product differentiation
- Solution and your intellectual property, if any
- Market size
- Sales and distribution plan and strategy
If you plan to bring additional materials that you want to hand out at the meeting (such as business plans, brochures, customer testimonials, market validation articles, etc.), please bring at least 15 copies.
For additional information, please contact us.