A recent small business investment trend that is directly affecting small business start-ups is the emergence of alumni angel groups affiliated with prominent colleges and universities. Currently, there are around 40 alumni groups connected to university business schools and/or entrepreneurship programs aimed at connecting established alumni investors with newly launched companies founded by other alumni. The average investment by individual alumni is typically around $25,000 or more, and often these angel alumni are able to offer additional help in terms of mentoring, education, and other forms of business support.
For alumni entrepreneurs looking to take advantage of this type of opportunity, they are able to benefit in so many other ways beyond simply the initial monetary investment. University based angel investors have a strong motivation to promote the success of the business so as to protect their investment and thus are usually also able to connect entrepreneurs with other potential investors and venture capitalists for further backing. Likewise, established investors are typically willing and able to mentor new entrepreneurs to help get their businesses off the ground, as well as connect them with a variety of other supportive resources and educational opportunities to help them succeed.
There has been a recent push for universities to strengthen their entrepreneurship curricula and degree programs, and alumni angel programs have provided an innovative and effective way for these universities to connect with their alumni, all while promoting their unique business-oriented offerings. These programs typically align nicely with many of the community building and economic development missions of most universities, and also have the potential to provide a unique learning opportunity for students by connecting them with practicing investors.
Strong alumni angel groups exist at such leading institutions as University of California Berkley’s Haas School of Business, Harvard Business School, and Stanford Graduate School of Business. Harvard Business School’s angel group today boasts 10 active chapters: 5 in the U.S. with additional organizations in London, Paris, India, China, and Brazil.
Damast, Alison. “MBA Startups Find Alumni Angels with Money to Burn.” Bloomberg Businessweek. 7/2/12. (7/22/12.) http://www.businessweek.com/articles/2012-07-02/mba-startups-find-alumni-angels-with-money-to-burn.