The RAIN Source Capital Angel Investment Model

There are a number of models used for Angel investing in early-stage companies.  RAIN Source has built a model that is very successful at teaching people who want to learn how to become active investors in early-stage companies through group managed and supported RAIN Funds.  The advantages of the RAIN Source Investment Model are:

• The Funds are formal, incorporated as member-owned LLC’s
• The Funds are member-managed, providing group support to investing
• Allows individual side-by-side investments, which leverages the group support and decision-making
• Syndication opportunities through the RAIN Source network of Angel Funds
• Access to web-based deal-flow, due diligence, and collaboration tools through Angelsoft,

The reason why Angels join RAIN Funds is clear: They are interested in providing active support to entrepreneurs, leveraging the expertise of members within the group.  For angels trying to invest by themselves, the challenges can be daunting. Deal sourcing and reading business plans are time consuming; due diligence may require locating and using outside experts – sometimes at a cost; and legal support can be expensive. RAIN Source Capital’s RAIN funds remove those barriers, and enhance investor returns by:

• Sharing capital, expertise and time with other RAIN fund members;
• Increasing the quality of deal flow;
• Ensuring thorough due diligence and monitoring;
• Reducing transaction and monitoring costs;
• Increasing capital available to sustain a company;
• Enhancing opportunity for timely exits.

As a Certified RAIN Source Capital RAIN Maker, we support the Angel investment community by helping groups of investors set-up, start, and manage RAIN Funds.  Contact us to discover how to begin the process!

Why Angel Investing in Minnesota?

The Minnesota Small Business Investment Tax Credit (the so-called Angel Tax Credit) was passed by the state legislature in 2010, which provides for a 25% refundable tax credit to Minnesota companies.  You can read more about it in the snapshot provided by Mojo Minnesota here.

The Minnesota Department of Employment and Economic Development is an excellent resource to become a qualified company or investor for Angel Tax Credit purposes.