Questions

As Angel Investor, is it my right to know who the other angels that invested in the same company are?

I invested in a start up company as an angel investor. I would like to know who the other angels that invested in the company are. Can I do that?

5answers

Here are 3 ways you could find out who the investors are.

Internal documents
At any AGM (annual general meeting, which you would have a right to attend) this would obviously be disclosed. Also in the shareholders agreement, all parties would likely sign and you could find out then, and without making a stink.

Public Filings
It depends on the jurisdiction but you could be able to see the public filings. This can be bad because generally it's not advantageous to have your ownership as public knowledge.

Introduction
Why not just ask the entrepreneurs for an intro? You gave them money, surely they could introduce you to other investors...


Answered 4 years ago

Yes.

I would question the motivations of the Founder/CEO if they are keeping this from you.

Pre-investment it's slightly different as it's understandable sometimes when negotiating if founders dont want to reveal other potential angels; you can then include that fact in your decision whether to invest. But post investment it would be very unusual and actually unhelpful to the founder/startup itself for investors not to know each other.

Ask for a copy of the CAP table.


Answered 4 years ago

Your rights as an investor should be clearly laid out in the shareholder's agreement you both signed (you have that, right?). If it's in there, you have the right, and if it isn't, you don't.

But aside from your shareholder rights there is also what's reasonable to expect as an investor and I can only think of one reasonable justification the company might have in refusing to tell you who the other shareholders are.

That would be if you're already in dispute with the CEO/board and are now seeking to talk to the other shareholders to see if you can ally with them to increase pressure on the CEO/board.

If that's the case you may have to wait for the AGM, wait for a poorly-addressed email to accidentally include all the shareholders email addresses in the cc instead of bcc field, or write to the board giving notice of the sale of your shares, in which case the shareholders agreement probably states that they have to give first right of refusal to other shareholders, and you can discover who they are through beginning that process (you don't have to complete the sale to find out who some/all of them are).


Answered 4 years ago

This should be a necessary part of your due diligence prior to completing your investment. Who else has invested, how much has been invested over what period of time? You should see a cap table and know what investment instruments have been used for prior investments (equity, either common or preferred; convertible debt/terms; debt/terms) before you invest, but if you already have, you should be able to get this information. My best advice? Ask!


Answered 4 years ago

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