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  • 1.           January 28 th , 2005 Steve Montoya Azul Venture Partners Vice-President, Hispanic-Net Venture Capital Funding
  • 2. Outline
    • Funding
    • Equity Financing
    • Venture Capital
    • VC Statistics
    • Advice
  • 3. Financing Alternatives
    • Bootstrap
    • Debt
    • Customers/Partnerships
    • Equity
  • 4. Equity Sources
    • Personal
    • Angel Investors
    • Partnerships/Corporations
    • Government
    • Private Capital Firms
    • Venture Capital Firms
  • 5. Equity Investment Model
    • Purchase % of Ownership
    • Risk Capital
    • High Growth Businesses
    • Strong Management
    • Realize a Large ROI
    • 7 to 10x Within 5 Years
  • 6. Stages of Equity Financing
    • Seed
    • Start-up/First
    • Second/Third
    • Expansion
    • Mezzanine
    • Buyout
    Seed Angel Series A Series B, C, … Mezzanine Early Stage Late Stage Hot Tip; Customer Commit
  • 7. Venture Capital
    • Definition
    An investment in a start-up business that is perceived to have excellent growth prospects but does not have access to capital markets. Type of financing sought by early-stage companies seeking to grow rapidly.
  • 8. Venture Capital
    • Why Use Venture Capital?
      • Require substantial capital to develop the product or service.
      • Must expand quickly to hit the market window.
      • Need the contacts to grow the business
  • 9. Venture Capital
    • What do Venture Capitalist Have?
      • Industry Expertise
      • Industry Contacts
      • Vast Experience in Starting, Growing, Selling Companies
      • Enjoy Working With Young Companies
      • They Want to Make Money !!!
  • 10. VC Investment Preference
    • Stage of Financing
    • Amount of Capital
    • Geographic
    • Industry Specialization
    • Management Team
    • Strong Referrals
  • 11. Venture Capitalists Look At
    • Vision
    • Leadership
    • Experienced Team
    • Target Market Potential
    • Business Model
    • Revenues, Revenues, Revenues
  • 12. How to Approach VCs?
    • Option 1 - Referral
    • Option 2 - Referral
    • Option 3 - Referral
  • 13. Venture Capital
    • Your Must Have’s
        • Clear Differentiation
        • High Barriers to Entry
        • Market Expertise
        • Business Model
        • Financials
        • Strong Management Team
  • 14. Investments—V C Industry Source: Moneytree Survey (PWC)
  • 15. 3 rd Qtr 2004 – National Top 6 Investments by Industry
    • Software 22%
    • Biomedical, Health 19%
    • Telecomm., Networking 17%
    • Medical Devices & Equipment 11%
    • Semiconductors 8%
    • Media, Entertainment 3%
    • Source: Venture Economics (www.ventureeconomics.com)
  • 16. 3 rd Qtr 2004 – National Top 6 Investments by Region
    • Silicon Valley 33%
    • New York 11%
    • New England 10%
    • Southeast 6%
    • Northwest 5%
    • Texas 4%
    Source: Venture Economics (www.ventureeconomics.com)
  • 17. 3 rd Qtr 2004 – National Investments by Rounds
    • Seed 0.4%
    • Early Stage 21%
    • Expansion 49%
    • Later Stage 30%
    Source: Venture Economics (www.ventureeconomics.com)
  • 18. Overview 2004
    • Investments have stopped declining
      • 2003 Investments – $18.8B
      • 2004 Investments – $20.8B
    • 1900 Companies funded – remains flat
    • $8.5M Average investment – remains flat
    • Most $ still going into existing portfolios
    Source: Pricewaterhouse Coopers (www.pwcmoneytree.com)
  • 19. Advice
    • Venture Capital
        • It’s a Marriage, Not a Date
        • One Opportunity for a First Impression
        • Seek Value-Added Partner
        • Ask Questions
    • Funding
        • Understand Your Options
        • Best Time to Raise $$$ is When You Don’t Need It
        • Control Your Expenses, Understand Financials
  • 20. Thank You

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