Angel and Venture Capital in Northwest Ohio

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Mike Bogdan’s talk on August 17, 2011, at the first Tech Toledo event. "Angel and Venture Capital in Northwest Ohio". http://www.techtoledo.net/events/a-few-links-from-august-17-meeting/

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Angel and Venture Capital in Northwest Ohio

  1. 1. Building!Company!ValueBuilding Company Value Property of Rocket Ventures Do not copy, reproduce or distribute without permission
  2. 2. ! “Third!Frontier!Program”!– Sponsored!by!the!ODOD! Management!Services!Team M tS i T! Pre"Seed,!Early!Stage!Venture!Fund! $22.5!Million!Program!financing: $22.5 Million Program financing: ! $15.0!Million!ODOD ! $7.5!Million!Private!Investors! Industries!of!Interest: Industries of Interest ! Advanced/Alternative!Energy ! Advanced!Mfg!&!Materials ! Biosciences ! Information!Technologies!(Opportunistic)! Geography!Focus!– Northwest!Ohio g p y Property of Rocket Ventures Do not copy, reproduce or distribute without permission
  3. 3. Clients!Gain!Access!to… Property of Rocket Ventures Do not copy, reproduce or distribute without permission
  4. 4. ADVANCED!BATTERY!CONCEPTS,!LLC Property of Rocket Ventures Do not copy, reproduce or distribute without permission
  5. 5. Property of Rocket VenturesDo not copy, reproduce or distribute without permission
  6. 6. 117 Startup/Seed Stage deals received $376MM (5% of total) - $3.2MM on average Property of Rocket Ventures Do not copy, reproduce or distribute without permission
  7. 7. ! Boot!Strapping ! Friends!&!Family,!Personal!Investment Friends & Family Personal Investment! Angel!Investors ! Wealthy!individuals,!!and!groups ! Limited!resources! Venture!Capital ! Seed, Early"stage and Growth phases Seed,!Early stage!and!Growth!phases ! Geography!and/or!Industry"focused! Others ! G tG t Government!Grants! ! Strategic!Alliances/Partners Property of Rocket Ventures Do not copy, reproduce or distribute without permission
  8. 8. ! An!angel!is!a!high!net"worth!individual!who!invests!his!or!her! own!money!in!start"up!companies!in!exchange!for!an!equity! own money in start up companies in exchange for an equity share!of!the!businesses.!! ! Many!angels!are!former!entrepreneurs!themselves.! ! Invest!to!gain!a!return!on!their!money. ! Participate!in!the!entrepreneurial!process. ! Often!to!give!back!to!their!communities!by!catalyzing!economic!growth.! ! Angels!tend!to!invest!in!companies!that!are!located!near!them!regionally. ! Seek!a!liquidity!event!in!4"8!years.! Individual angels may join with other angels to invest Individual!angels!may!join!with!other!angels!to!invest! collectively!as!a!group. Property of Rocket Ventures Do not copy, reproduce or distribute without permission
  9. 9. ! Money!provided!by!professionals!who!invest!alongside! management!in!young,!rapidly!growing!companies!that!have! management in young rapidly growing companies that have the!potential!to!develop!into!significant!economic!contributors.! Venture!Capitalists!generally: ! Finance!new!and!rapidly!growing!companies.! ! Purchase!equity!securities. ! p p Assist!in!the!development!of!new!products!or!services.! ! Add!value!to!the!company!through!active!participation.! ! Take!higher!risks!with!the!expectation!of!higher!rewards.! ! Seek a liquidity event in 3"5 years. Seek!a!liquidity!event!in!3 5!years. Property of Rocket Ventures Do not copy, reproduce or distribute without permission
  10. 10. ! While!both!invest!in!entrepreneurial!firms!and!take!equity! (ownership)!in!those!businesses,!there!are!some!important! (ownership) in those businesses there are some important differences:! ! Funding!Source! ! Angels!invest!their!own!funds!directly!in!a!business,!while!venture! capitalists!invest!funds!from!other!sources!(e.g.!pension!funds).! ! Stage!of!Business ! In!general,!angels!invest!in!seed,!start"up!and!early"stage!businesses,! while!venture!capitalists!invest!in!later"stage!businesses.! ! Size!of!Investment ! Venture!capitalists!generally!invest!$2!million!and!up!in!a!financing! round,!while!individual!angels!make!much!smaller!investments!($5,000! to!$100,000!and!most!often!larger!if!from!a!group). Property of Rocket Ventures Do not copy, reproduce or distribute without permission
  11. 11. ! In!general,!the!best!time!to!seek!investment!funding!from! Angels!and!VCs!is!when:! Angels and VCs is when: ! Your!product!is!near!completion!or!developed.! ! You!can!demonstrate!market!validation!" existing!customers!or!potential! customers!who!will!confirm!they!will!buy!from!you.! t h ill fi th ill b f ! You!can!demonstrate!that!the!business!is!scalable!to!at!least!$15"30! million!in!revenues.! ! Y i Youve!invested!your!own!dollars!and!exhausted!other!alternatives,! t d d ll d h t d th lt ti including!friends!and!family.! ! Your!business!plan!is!tip!top!shape.! ! Y h “ l i h” You!have!!an!“elevator!pitch”. ! You!are!willing!to!give!up!some!ownership. Property of Rocket Ventures Do not copy, reproduce or distribute without permission
  12. 12. ! Sample!criteria!used!to!“initially”!evaluate!your!business!idea! include: ! Management!Team ! Market!Opportunity ! IP/Technology!– Is!it!disruptive? / ! Faster,!Better,!Cheaper ! Stage!of!Commercialization ! Pre!or!Post!Revenue ! Funding!Requirements! ! How!much!money!do!you!need!to!reach!a!liquidity!event? y y q y ! Milestones!Achieved ! Time!to!Exit ! Amount of Cash Founders Have Contributed Amount!of!Cash!Founders!Have!Contributed Property of Rocket Ventures Do not copy, reproduce or distribute without permission
  13. 13. ! Initial!Investigation ! Overview!Assessment Overview Assessment ! Discussions!with!Management! In"depth!Investment!Assessment ! Analysis!of!Management ! Review!Intellectual!Property ! Analysis!of!Market!&!Opportunity ! Analysis!of!Operations/Business!Model ! Make!Key!Industry!Contacts ! Research!Industry!Exit/Liquidity!Activity y / q y y! Negotiation!of!the!Terms!of!Investment! Estimated!Timing!" 90!to!180!Days Property of Rocket Ventures Do not copy, reproduce or distribute without permission
  14. 14. ! Core!Network!" Toledo,!OH!! Millstream!Angel!Club!– Findlay,!OH Mill t A l Cl b Fi dl OH! Akron!ARCH!Angels!" Akron,!OH!! Ohio!TechAngels Columbus,!OH! Ohio TechAngels " Columbus, OH! North!Coast!Angel!Fund!" Cleveland,!OH!! Queen!City!Angels!" Cincinnati,!OH!! Medical!Growth!Fund!" Cleveland,!OH!! Blue!Water!Angels!" Midland,!MI!! First Angels Kalamazoo MI First!Angels!" Kalamazoo,!MI!! Grand!Angels!" Grand!Rapids,!MI! Property of Rocket Ventures Do not copy, reproduce or distribute without permission
  15. 15. ! Plymouth!Ventures!– Toledo,!OH! Early!Stage!Partners!– Cleveland,!OH E l St P t Cl l d OH! Chrysalis!Ventures!– Cleveland,!OH! Arboretum!Ventures! Cleveland,!OH Arboretum Ventures – Cleveland, OH! RiverVest Venture!Partners!" Cleveland,!OH! Reservoir!Venture!Partners!– Columbus,!OH! NCT!Ventures!" Columbus,!OH! Fletcher!Spaght Ventures!– Columbus,!OH! Adena Ventures Athens OH Ventures!– Athens,!OH! Draper!Fisher!Jurvetson " Cincinnati,!OH! Triathlon!Medical!Venture!Partners!– Cincinnati,!OH , Property of Rocket Ventures Do not copy, reproduce or distribute without permission
  16. 16. Mike!BogdanRocket!Ventures2600!Dorr!StreetToledo,!Ohio!43606Voice:!!!!419.530.6084Email:!!!!bogdan@rocketventures.orgWeb: www.rocketventures.org Rocket!Ventures!is!a!$13.5!million!venture!capital!firm!jointly!funded!by!the!Ohio! Rocket Ventures is a $13 5 million venture capital firm jointly funded by the Ohio Department!of!Development!and!private!investors.!In!exchange!for!an!equity!state,! Rocket!Ventures!invests!between!$250,000!to!$750,000!in!technology"based! companies,!requiring!seed!and!early!stage!funding,!who!are!either!located!or!have!a! significant!presence!in!Northwest!Ohio. Property of Rocket Ventures Do not copy, reproduce or distribute without permission

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