Frequently Asked Questions
Q. When did 99 Tartans start?
A. May 2017.
Q. Who runs 99 Tartans?
A. 99 Tartans is organized and managed by volunteer Carnegie Mellon University alumni and students.
Q. How many members are in 99 Tartans?
A. As of August, 2019, 99 Tartans has 141 members. Approximately 33% are located in Pittsburgh, 33% are located in San Francisco & NYC, and 33% are distributed around the rest of the United States.
Q. Who can join 99 Tartans?
A. 99 Tartans is open to all Carnegie Mellon Univeristy Alumni who are accredited to invest in non-publicly traded securities.
Q. What is the minimum invest?
A. There is a minimum investment of $5,000 per deal.
Q. How do I sell my investment?
A. Early-stage startup investment are very risky and long term. Investments are generally illiquid for many years.
Q. Do I have to invest in every deal?
A. No, all investments are opt-in deal by deal at your discretion.
Q. Where do deals come from?
A. Investment opportunities are sourced from members. The best opportunities are startups a member has mentored and now feels is at a good stage for further investment. Some startups apply directly though the website.
Q. Why is a Lead Investor required?
A. There are several models for Angel Investing. Angel groups often have paid staff and organized diligence committees which manage and qualify deal flow before companies present to the membership. 99 Tartans uses the syndicate model. The syndicate model relies on the Lead Investor’s personal diligence process instead of the committee approach. It is therefore important that the lead investor have credibility as an investor for the investment to be successfully funded.
Q. What is required to be a Lead Investor?
A. A Lead Investor needs to have a track record of making individual angel investments prior to 99 Tartans. Those investments do not need to be CMU related.
Q. How are investment made?
A. For each investment a new Limited Liability Company (LLC) is created which consists of the subset of the membership interested in this specific startup. Each LLC has a lead investor who is the Managing Member. Investors received a membership share in the LLC. The LLC is a single line item on the Capitalization Table for the company.
Q. Can I invest directly in the startup?
A. Members who learn about investments opportunities through 99 Tartans should invest with the 99 Tartans. You should not invest directly in the company unless 99 Tartans does not pursue an investment.
Q. Is there a management fee?
A. 99 Tartans is not a fund and does not manage any investor money. Therefore, there is no a management fees. Each investment LLC has a managing member. The managing member, also called the Lead Investor, received 10% of capital appreciation on the investment. 99 Tartans, LLC also received 10% of capital appreciation to help support ongoing operation of the network.
Q. What are the typical investment sizes?
A. We typically investment $100,000 - $150,000 into convertible notes or SAFE seed rounds of $500,000 - $1,000,000. 99 Tartans seeks follow-on rights on Series A conversion terms.
Q. What infrastructure is in place post close?
A. Each Investment LLC has a managing member who is the single point of contact between the founders and the membership. 99 Tartans, LLC manages the annual tax filing and K-1 distributions.
Q. Does 99 Tartans only invest in CMU Pittsburgh startups?
A. No. 99 Tartans invests in any United States based company.