Networking With Investors 2009 By Hall Martin Austin Entrepreneur Network

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Hall Martin's Presentation at the NetworkInAustin.com NetStorming Event on October 12, 2009.

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Networking With Investors 2009 By Hall Martin Austin Entrepreneur Network

  1. 1. Networking with Investors<br />Sources – Networking – Personal IP <br />
  2. 2. Raising Angel Funds<br />Deals raising $2M or less<br />Strong management team<br />Focused Go-to-Market strategy<br />Seeking 3 to 5x return in 3 to 5 years<br />
  3. 3. Raising VC funds<br />Deals raising $2M+<br />Large target market<br />High dollar per sale<br />
  4. 4. Emerging Technology Fund<br />Grants<br />Commercialization<br />Research Grant Matching<br />Requirements<br />Tie to a Texas University<br />In target research area<br />Workshops Available<br />RCIC—Regional Center for Innovation & Commercialization<br />
  5. 5. SBIR<br />SBIR Qualifications:<br />Technology-based companies<br />American-owned and independently operated <br />For-profit <br />Principal researcher employed by business <br />Company size limited to 500 employees <br />SBIR Setup<br />Each Dept. runs own SBIR<br />DOD (easiest) to NIH (hardest)<br />
  6. 6. SBIR Cont.<br />Phases<br />Phase I:  $100K (6-9 months)<br />Phase II:  $750K (2 yrs)<br />Phase III:  No limits on funding or duration (not funded by allocated set-asides)<br />Reality Check<br />Takes 40 hours to complete a Phase 1 proposal<br />Only 15% of submitted plans for Phase 1 are accepted<br />33% of Phase 2 plans are accepted<br />
  7. 7. Other Sources<br />Family/Friends/Founders<br />Angels will expect you to tap these first<br />Debt financing<br />Lend $100K to $1.5M<br />Need collateral or personal guarantee<br />Purchase Order financing<br />Equipment Financing<br />Equipment serves as collateral for loan<br />Factoring-- Selling the Accounts Receivables<br />Micro lenders<br />- $15 to $150K loans<br />
  8. 8. Motivations of Angel investors<br />Do a little good, have a little fun, make a little money.<br />
  9. 9. Different Type of Angels<br />Marriage partner—in for the long haul<br />Networker—industry knowledgeable<br />Executive recruiter—management specialist<br />Therapist—CEO coach<br />Strategic partner--specialist<br />General utility player—jack of all trades<br />Fund raiser—knows where the money is<br />Source: “Every Business Needs an Angel” John May<br />
  10. 10. Top Mistakes by Entrepreneurs<br />1.    Not Knowing Your Market and Customer <br />2.    Not Considering Your Competition<br />3.    Overstating Business Progress <br />4.    Being Resistant To Additional Management <br />5.    Insisting That You Are Right<br />6.   Not Knowing What You Will Do With the Funds <br />7.    Misrepresenting Financial Status & Not Disclosing Material Facts<br />
  11. 11. What Angels Look for in Deals<br />Management is seasoned and capable<br />Proof of Market<br />Compelling Competitive Advantage<br />Realistic Financial Projections<br />Intellectual Property<br />Scalability<br />Passion<br />Coach ability<br />Broad Platform<br />Existing, mature distribution system<br />Return on Investment<br />
  12. 12. How to Get in Front of Angel Investors<br />Become the expert in your space and give speeches and workshops on the topic<br />Participate in Fastpitch Competitions –- stand and deliver<br />Join groups where investors gather<br />Ask entrepreneurs for introductions to investors<br />
  13. 13. Networking with Investors<br />Know who’s in your network <br />Look for those who can help beyond just funding<br />Create visibility for yourself<br />Be clear about what you need<br />Know your market, product, and customer better than anyone else<br />Keep the pitch positive – don’t complain about hard it is<br />
  14. 14. Networking with Investors<br />Build a relationship<br />Take them with you on the “journey”<br />Invite them to your Board of Advisors<br />Keep them informed of your progress with regular communications<br />Demonstrate ability to execute<br />
  15. 15. One Final Thought<br />Your startup has Intellectual Property (IP) but . . . <br />
  16. 16. Your Personal IP<br />What is your Personal IP?<br />What do you bring to the table that no one else is bringing?<br />How does this help your startup?<br />How can this help your investor?<br />
  17. 17. Discussion<br />Hall T. Martin<br />Austin Entrepreneur Network<br />director@<br />austinentrepreneurnetwork.org512-656-9487<br />

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