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About IMAF-RTP: Executive Summary

IMAF-RTP is a member-managed seed stage angel capital fund designed to capitalize on the growth in entrepreneurial activity and venture financing, primarily in the Research Triangle Park area of North Carolina, in syndication with other IMAF groups and in selective areas of Virginia and South Carolina.  IMAF-RTP is part of North Carolina’s IMAF Family of Funds and the NC Capital Highway. (www.nccapitalhighway.com).

Structure - IMAF-RTP is a member-owned and member-managed limited liability company, organized to provide members an opportunity for active involvement in a diversified capital investment process.

Fund Size - $3.0 million target.

Unit Price - $15,000/unit

Goals - The Fund will seek to enhance the wealth creation of its members by investing dollars as well as time and relationships in early stage, high quality, and high growth companies in the Research Triangle Park area and other geographic areas if appropriate in order that those companies achieve success.

Member Profile - IMAF-RTP’s strength lies in its members, a group of highly successful men and women, primarily from the many businesses and communities within the Research Triangle Park area of North Carolina, and in its disciplined investment model. The membership represents a variety of professional experiences.

All members are “accredited investors,” by Securities and Exchange Commission definition.

Founders and  Fund Executives - Rich Kramarik and Bill Warner                

Active Members - All members are encouraged to actively participate in the investment process, attending screening and monthly member presentations, making personal add-on investments as individually desired, and responding to Fund Executive requests for special expertise or input as members conduct due diligence on prospects and assist IMAF-RTP’s portfolio companies.  It is understood that availability to participate may vary by member over the life of the fund and that some members will be more active than others.

Advisors - It is anticipated that “advisors” with venture capital experience will be selected to assist with information regarding trends and opportunities in their industry.  This knowledge is valuable since venture funds are candidates to provide follow-on capital in the investment continuum.  In addition IMAF RTP will participate in and enhance the Human Capital Database of the NC Capital Highway.

Investment Criteria - IMAF-RTP will use the following criteria, as guidelines, when considering companies for investment.

  • Invests in emerging, high growth companies, preferably (but not exclusively) located in, or near, the Research Triangle Park region of North Carolina. These companies generally are seeking their earliest round of financing. They will typically be at the start-up stage or one step beyond start-up, will be in the process of selecting a management team, and will already have founder and/or “friends and family” money invested in the company.

  • Often invests in seed or start-up rounds.

  • Typically invests between $25,000 and $150,000 per company with a company board seat, or observer rights, being allocated to IMAF-RTP. This does not include optional member add on investment through the fund.

  • Typically initiates and then co-invests with other venture capital funds, angel groups, or Super Angels (high net worth individuals who invest large amounts to a company)

  • It is anticipated that IMAF-RTP will invest in up to 15 portfolio companies, depending upon the total amount of capital committed

  • It is anticipated that no more than 10% of IMAF-RTP’s fund size will be invested in any one company.

Companies that receive investments from IMAF-RTP possess:

  • An experienced, dedicated and motivated management and advisory team

  • With a sound business concept and a realistic business model

  • Coupled with leading edge technology

  • And the opportunity to become a market leader,

  • Resulting in near term profitability

  • And a clear path to exit

Executive Committee Screening - The IMAF-RTP Executive Committee (providing for executive oversight), managed by the Fund Executive, will have 3-5 members, elected to rotating terms by the members.  It will provide the overall direction and administration of the Fund. Screening and due diligence meetings will be open to all members and their active participation is encouraged. Executive Committee responsibilities include, but are not limited to:

  • Networking to find new investment opportunities

  • Defining and managing the overall investment process; including screening, reviewing, selecting, coaching, conducting due diligence and recommending.

  • Meeting as required to screen new companies, analyze the results of due diligence, guide investment decisions options, formulate term sheets for those investments, conduct investment negotiations and close investment deals.

  • Monitoring and managing the Due Diligence processes.

  • Attending monthly meetings to:

    • Present companies so that the entire membership can make decisions regarding fund investments and determine individual add-on investments opportunities, and

    • Update membership on general portfolio issues.

  • Networking with other angel funds and venture funds to develop deals together and to obtain follow-on funding for IMAF-RTP companies.

How Investment Decisions are Made - The basic process for determining which companies IMAF-RTP will invest in is flexible. With input from similar funds, IMAF-RTP members will periodically review this process. In general, the process includes the receipt, logging, and screening of business plans, with company presentations to the Executive Committee. The Executive Committee will evaluate the company through the due diligence process and make a recommendation to the membership at a General Member meeting. The general membership will vote as to whether or not to accept the Executive Committee recommendation regarding investment in a presenting company; requiring a super-majority to accept.  A more detailed description of the investment decision process is available.

Administrative Costs/Structure - IMAF-RTP contracts with the Fund Executive to provide the administrative infrastructure.

  • Administrative fees, based on committed funds and add-on investments, contracted annually, go towards the administrative infrastructure needed to conduct business.

  • Carried interests on excess distributions from fund and add-on investments are provided for the above referenced administrative infrastructure.

Add-on Investments - Add-on investments are opportunities for members to invest an additional amount of their own money through the Fund, in addition the amount the Fund is investing. The add-on investments are simply added to the member’s capital account as additional shares of the company in which the investment is being made. For example, Company X may indicate that it is interested in a total investment from IMAF-RTP of $50,000.  The Fund may decide to invest $25,000 in the current round in Company X.  That would leave an investment of up to $25,000 that could be available for members to invest in the current round on a pro rata basis of units held.  In the event that certain members do not elect to take their pro rata portion of available add-ons, other members would have the opportunity to take more than their pro rata portion. 

NC Tax Credit - An investment in IMAF-RTP may entitle investors to a NC tax credit.  IMAF-RTP is a certified Qualified Grantee Business because of an investment made by the NC Biotechnology Center.  As a result, investors in IMAF-RTP may apply for a credit of up to 25% of the amount of his or her investment in IMAF-RTP on the investor’s NC income tax return for the year following the year of investment.  This credit applies to investments paid prior to the end of 2010 and has been extended to include 2011.

Miscellaneous - If a member works with a portfolio company as a board member or in any major role, it will be up to the portfolio company and the member to negotiate an appropriate compensation plan.

Support - The Small Business & Technology Development Center (SBTDC) will play a significant role in assisting IMAF-RTP through its educational programs such as Investor-Ready Entrepreneur, NC Angels: Investing Close to Home, the Human Capital Database and the NC Capital Highway.