Walnut Venture Associates are a group of angel investors. In 1997 the club had around a dozen individual investors, forming an “angel group”. Their primary targets are investments ranging from $250,000 to $1,000,000. This is due to the gap of capital funds initiated by the VC’s from not considering investments bellow $1 million. Also, angel investors can acquire significant equity at low cost, and help the growth of the company with their knowledge and expertise. By selecting only the most exceptional people and ideas, investments in startups can lead to massive returns on relatively small investments. As unexperienced entrepreneurs, they are a key resource to have in order to achieve quick growth, and secure the company’s early stages.
RBS began product development in 1992, and first launched to the software industry in 1994. By the end of 1997, their annual revenue rate was close to $5 million. RBS now seeks a 2 million dollar investment, to be used for sales expansion, global marketing, and product development. So why would Walnut even consider investing if the company is past startup status? Since their primal motive is to maximize earnings, they may allow going over their common investment range if the opportunity seems truly worth it. RBS does seem to have the essentials to a great company with a strong management team, a proven product, and a solid execution of their plans. The market they are in, the software industry, is growing at 5 times the rate of the rest of the economy, and is present in very high density throughout major cities of North America. Therefore if part of the investments is spent creating regional sales office in key areas, the paybacks may be almost immediate. Before investing, Walnut should consider if there was any progress towards getting the technology proprietary. If not, some investigation should be made towards if they can