Our Mandate

With the aim of becoming patrons of the startup industry in Saudi Arabia and the GCC, we decided to aim our investments at the late-seed/early growth stage startups which is not only a stage that is most neglected by Angel groups and VCs but is a stage which startups are normally preparing to slingshot themselves on their trajectory of growth therefore open to offering favourable share prices while being in a position to be properly vetted by investors who have a little sense and a lot of faith.

 

We also wanted to simplify the application and negotiation process on the startup's side, which is why we set a predetermined valuation and term sheet knowing that that's the average valuation for startups at that stage in the market, as well as the fairest terms by which a startup would abide by at that stage of investment. 

 

We also decided to limit the club to a few Angels because we want to keep the club tightknit which will make the investment process easier and smoother.

 

There are traditionally two ways of angel investment, to be part of a fund which relinquishes the angel's ability to decide on the direction of their investment, or a request based investment process which allows the angels to decide on whether they want to invest in a particular round or not. Both scenarios have their advantage and disadvantages on both sides, but in order to make sure every ticket is full we've decided to adopt a democratic voting system which allows the angels to vote on any particular round but the majority votes always decide whether the investment is made or not. This is done through online vetting and then pitch events which allow the angels to get first-hand knowledge of the investment and time to lobby other angels on investing in their favourite startup.

Investment Option

Late-Seed/Early Growth Stage

 

Startup criteria: Product launched and 3-12 months of upward traction

Total club investment: 500,000 sr.

Total club equity acquired: 25%

Startup valuation: 2,000,000 sr.

Member investment: 50,000 sr. each 

Individual member equity: 2.5%

Our Obligations

  • Club 20 will actively search for and vet each GCC (mainly Saudi) startup before presenting them to the club.

 

  • Club 20 commits to providing its members with 1 investment per year from either a seed stage, a late seed stage or an early growth stage startup.

 

  • We split the 20% into parcels of 1% investments so each member is guaranteed at least 1% each. Angels can only be allowed to buy in for more than 1% if other angels opt out of their allocated shares.

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  • Club 20 gets no commision from the club members but instead gets 2% from the startup on top of the 20% equity on any given investment.

 

  • Club 20 will handle the legality of the round.

  • Club 20 will not handle funds but merely hold all funds in an account before investment. 

 

Your Obligations

  • Each member will have to invest in at least 1 startup per calendar year to remain part of the club.

 

  • Club members will have to be available at pitch competitions to vote for their startup of choice. 

 

  • Angels must be GCC nationals.

 

  • Angels are responsible for monitoring their investment post-investment.

 

Investment Process

  • Angels will be asked to make a 50,000 s.r. deposit in the club's bank account, simultaneously they will get a certified check of the same amount to reassure them of their ability to withdraw and exit the club. 

 

  • A few vetted startups will be presented to the club through the club's online portal.

 

  • Club members are then requested to analyse the startup for themselves.

 

  • A pitch event will happen where the teams of startups will present their startups to the club.

 

  • After that through a democratic voting system, the startup with the most votes will be the one to be investing in. Any votes of member absent will be voted in the favour of the club management's decision. 

 

  • The members will be asked to sign the subscription agreements and the funds will be released.

 

  • If more shares are wished to be acquired during a maximum capacity of 10 angels wishing to invest in the startup, then that will be looked at on a case by case basis with the startups themselves.

 

  • Each member will receive a share certificate equivalent to their share amounts and new membership subscriptions will be asked to be made for the next calendar year.