Angel Investing as an Asset Class

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Angel Investing as an Asset Class - presented by MLA Member Nancy Lala as a part of a webinar series presented by CanWIT.

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  • Commercialization funding gap is the Valley of Death
  • Angel Investing as an Asset Class

    1. 1. A N G E L I N V E S T I N G A S A N A S S E T C L A S S
    2. 2. www.mapleleafangels.com | info@mapleleafangels.com | 416.646.6235 | @mapleleafangels AGENDA WHO ARE TYPICAL ANGELS WHO ARE MAPLE LEAF ANGELS ANGEL INVESTING IN CANADA ANGEL INVESTMENT QUESTIONS & ANSWERS
    3. 3. www.mapleleafangels.com | info@mapleleafangels.com | 416.646.6235 | @mapleleafangels MLA CONNECTS Our mandate is to connect experienced accredited investors, and the brightest, most passionate entrepreneurs in an effective investment process.
    4. 4. www.mapleleafangels.com | info@mapleleafangels.com | 416.646.6235 | @mapleleafangels ANGEL NETWORKS IN CANADA • National Angel Capital Organization ( NACO) - Canada’s industry association representing Angel capital in Canada • 28 Angel Groups in Canada • They have collectively about 1500 investors • The majority have fewer than 50 members • 50% of groups set up since 2008 • Network of Angel Organizations Ontario (NAOO) – Umbrella organization for Ontario based groups • Currently Southern Ontario Angel Investment community has 13 groups
    5. 5. www.mapleleafangels.com | info@mapleleafangels.com | 416.646.6235 | @mapleleafangels BOARD OF DIRECTORS Board Chair Board Vice Chair Chair- Membership and Events Committee Chair- Technology Committee Board Member Chair – Investment Review Committee
    6. 6. • Wealthy individuals – “accredited investors” • “Been there, done that” entrepreneur • Active investors – invest to engage • Range of involvement - Lead investor: Chair of the board - Investor/advisor - Passive investor www.mapleleafangels.com | info@mapleleafangels.com | 416.646.6235 | @mapleleafangels WHO ARE THESE ANGEL INVESTORS?
    7. 7. • Return on Investment is the Metric (23%-27%) • Staying involved (sense of usefulness) • Give back to community • Affection for entrepreneurs  Source: Angel Investing – an Overview. Angel Resource Institute www.mapleleafangels.com | info@mapleleafangels.com | 416.646.6235 | @mapleleafangels MOTIVATION OF ANGEL INVESTORS
    8. 8. VALLEY Source: Entrepreneurial Energy www.mapleleafangels.com | info@mapleleafangels.com | 416.646.6235 | @mapleleafangels ANGEL INVESTMENTS – HOW YOU HELP
    9. 9. • Companies are identified • Investment Review Committee prescreens • Coaching sessions for selected companies • Investment meeting with all the Angels • Due Diligence Team • Standard Terms but individual amounts www.mapleleafangels.com | info@mapleleafangels.com | 416.646.6235 | @mapleleafangels HOW MLA INVESTING WORKS
    10. 10. www.mapleleafangels.com | info@mapleleafangels.com | 416.646.6235 | @mapleleafangels INVESTMENT HISTORY Sentient Magnetic 22 Investments $9.6 Million +
    11. 11. www.mapleleafangels.com | info@mapleleafangels.com | 416.646.6235 | @mapleleafangels WHAT ELSE? PATIENCE IS REQUIRED • 1X typically takes 2.5 to 3 years • 10X is expected to take 4-5 years • 30X could take 8 years or more • Hint: Angels should not expect high portfolio yields (IRR) after only three years of investing!
    12. 12. www.mapleleafangels.com | info@mapleleafangels.com | 416.646.6235 | @mapleleafangels DETERMINING SIZE OF ANGEL CHEQUES • Invest in at least 8-10 deals (lifetime) • Average of two investments per company (many one or two, but some three or more) • Allocate 20 investments in total • Determine total personal assets set aside for angel investing (3-10% of total assets) • Divide total commitment by 20 investments • Write cheques averaging this size for angel deals
    13. 13. www.mapleleafangels.com | info@mapleleafangels.com | 416.646.6235 | @mapleleafangels Closing Comments • Angel Investing is a contact sport! • Direct correlation between the hours spent on Due Diligence and IRR • You can expect to spend 40+ hours on Due Diligence for each investment • Ongoing Support and Mentorship critical to the success of ventures
    14. 14. www.mapleleafangels.com | info@mapleleafangels.com | 416.646.6235 | @mapleleafangels Upcoming Events September 25 U of T Innovates October 21 Women in Technology November 18 Healthcare Technology
    15. 15. www.mapleleafangels.com | info@mapleleafangels.com | 416.646.6235 | @mapleleafangels CONTACT

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