Deal Screening

Deal Screening

October 6, 2021 by investor

The deal screening process is a key program for an angel group.

The process needs to capture all available deals in one place for review.

For each deal, sufficient information must be provided by the startup including their revenue, sector, product stage, and fundraise sought.

The screening process can be done by the group as a whole, by a select number of members, or by the director.

The first step is to filter out all deals that do not meet the group’s basic criteria.

This typically cuts the number of submitted applications in half.

The second step is to filter based on the quality of the deal such as traction, strength of the team, and size and growth of the target market.

This typically cuts the number of applications in half again.

The third step is to talk with the startups to gather additional information about fundraise status and valuation.

This cuts the number of applications in half yet again.

The fourth step is to choose the top 5 to 7 deals to go through the presentation process inviting the rest to apply on the next deal flow cycle.

After the presentation process, the fifth step is the due diligence and funding process which pursues two to three deals for investment.

The deal screening process is important as it provides an efficient method for identifying the deals to present and fund.

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Hall T Martin is the director of Investor Connect, which is a 501(c)(3) nonprofit dedicated to the education of investors for early-stage funding. All opinions expressed by Hall and podcast guests are solely their own opinions and do not reflect the opinion of Investor Connect. This podcast is for informational purposes only and should not be relied upon for the basis of investment decisions.