Flying With The Angels


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Jerry Masin presentation on angel investing on behalf of the Greater Princeton Area Chapter of SCORE.

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Flying With The Angels

  1. 1. Flying with the Angels Strategy and Tactics for Engaging Angel Investors
  2. 2. Now more than ever, mentors matter. In times of uncertainty, building additional skills and capabilities for success are competitive advantages. SCORE provides resources and expertise to maximize the success of entrepreneurs, emerging and small businesses. Flying with the Angels SCORE - Trusted Mentors in Turbulent Times - Our Mission
  3. 3. SCORE is committed to fostering economic development through the support of entrepreneurship, emerging and existing businesses and employment sustainability. The SCORE Association is the premier free business mentoring and advice service in the United States. SCORE, “Counselors to America’s Small Business”, is a non-profit association with 364 offices across the country. For 45 years, SCORE’s 12,400 working and retired business professionals have volunteered to help new generations of entrepreneurs and businesses. SCORE provides business mentoring as a free and confidential public service. SCORE is a resource partner with the U.S. Small Business Administration (SBA). Each year, SCORE serves over 350,000 clients . Since being founded in 1964, more than 8.5 million individuals have been counseled by SCORE or attended SCORE workshops. Flying with the Angels About SCORE
  4. 4. Flying with the Angels About Jerry Masin Jerry Masin is Founder and Principal Advisor of CompasScale LLC. CompasScale is a management consultancy whose focus is building organizational capacity and capabilities for early-stage and emerging companies through the strategic design and implementation of technology and human capital infrastructure. CompasScale also provides retained and pro bono advisory services to for-profit and non-profit organizations on entrepreneurial development, business acceleration, and venture catalyst programs. Masin has over 30 years experience in building global organizations along with technology and human resources disciplines. He has led business-centric staff functions and has specific interest and expertise in the area of blended resource management. As a small business and venture counselor. Masin actively supports economic development and entrepreneurship through his volunteer work with SCORE, Counselors to America’s Small Business, the New Jersey Institute of Technology’s Enterprise Development Center, the Institute for Entrepreneurial Leadership, Einstein’s Alley, Farleigh Dickinson University’s Sustainable Business Incubator and the Rutgers Business School’s Institute for Ethical Leadership.
  5. 5. <ul><li>Secure a better understanding of SCORE and its benefits to those we serve and those who serve with us </li></ul><ul><li>Entrepreneurial ecosystem </li></ul><ul><li>Funding sources </li></ul><ul><li>Angel investing dynamics </li></ul><ul><li>Review of NJ Venture Groups </li></ul><ul><li>Distribute funder list from NJEDA </li></ul><ul><li>Questions and Answers </li></ul>Flying with the Angels Agenda and Goals
  6. 6. Flying with the Angels The Entrepreneurial Ecosystem
  7. 7. <ul><li>Friends & family – high net worth individuals who oftentimes have a direct connection with the entrepreneur </li></ul><ul><li>Debt financing – commercial banks, venture banks, government grants </li></ul><ul><li>Angel financing – early capital which can be strategic and often comes in the form of Common Stock </li></ul><ul><li>Strategic financing – vendors, suppliers or customers who have a vested interest in the success of the business </li></ul><ul><li>Venture Capital - professionally managed money invested in young, rapidly growing companies with large economic potential. </li></ul><ul><li>. </li></ul>Flying with the Angels The “4 Fs” – Family, Friends, Founders and Fools
  8. 8. <ul><li>Seed Money: Low level financing needed to prove a new idea (Angel stage) </li></ul><ul><li>Start-up: Early stage firms that need funding for expenses associated with marketing and product development </li></ul><ul><li>First-Round: Early sales and manufacturing funds </li></ul><ul><li>Second-Round: Working capital for early stage companies that are selling product, but not yet turning a profit </li></ul><ul><li>Third-Round: This is expansion money for a newly profitable company </li></ul><ul><li>Fourth-Round: This round is intended to finance the &quot;going public&quot; process </li></ul>Flying with the Angels Venture Funding Stages
  9. 9. The term “angel investing” actually has its history in the theater. Wealthy patrons of Broadway productions were often referred to as “angels”. Since the late 1970’s, the term angel has been used in reference as a funding source for entrepreneurs in search of seed capital. Angel investors provide seed funds for proof of concept, product development, market research, business plan development, recruiting management and early production. Start-up capital is provided for early stage business production, expansion and growth. Flying with the Angels What is Angel Investing?
  10. 10. <ul><li>High income / net worth individuals </li></ul><ul><li>$200K+ income for two years or $1 million+ net worth (accredited investor – SEC) </li></ul><ul><li>Willing to assume seed stage / start-up stage risk </li></ul><ul><li>General industry experience in investment(s) areas </li></ul><ul><li>Individuals </li></ul><ul><li>Open associations </li></ul><ul><li>Investing groups and networks </li></ul>Flying with the Angels Who are Angel Investors and How are They Organized?
  11. 11. <ul><li>Investment Horizon - 3 to 5 years􀁺 </li></ul><ul><li>6X to 10X on investment􀁺 </li></ul><ul><li>Scaleable operations </li></ul><ul><li>Flexible ownership positions </li></ul><ul><li>Ongoing relationship with management </li></ul>Flying with the Angels What do Angel Investors Expect?
  12. 12. <ul><li>A strong management team with experience and proven skills </li></ul><ul><li>Unique product or service distinguished by an identified competitive advantage and large market </li></ul><ul><li>Personal financial investment in the company and investments from friends and/or family </li></ul><ul><li>A clear picture of the market for your product or service and realistic plan for market penetration </li></ul><ul><li>A clearly defined exit strategy and strong return on investment probability </li></ul>Flying with the Angels What Matters to Angel Investors
  13. 13. <ul><li>Executive Summary </li></ul><ul><li>Company Description </li></ul><ul><li>Product or Service </li></ul><ul><li>Market Analysis </li></ul><ul><li>Strategy and Implementation </li></ul><ul><li>Management Team </li></ul><ul><li>Financial Analysis </li></ul>Flying with the Angels The Business Plan
  14. 14. <ul><li>Application </li></ul><ul><li>Pre-Screening </li></ul><ul><li>Screening </li></ul><ul><li>Investment Meeting </li></ul><ul><li>Due Diligence </li></ul><ul><li>Term Sheet </li></ul>Flying with the Angels Stages of the Angel Funding Process
  15. 15. Flying with the Angels The Angel Deal Flow Process
  16. 16. Flying with the Angels Few are Invited…Fewer are Chosen
  17. 17. <ul><li>A really great angel helps an entrepreneur </li></ul><ul><li>See around the corner </li></ul><ul><li>Gain a sober second opinion </li></ul><ul><li>Network with people who can help build the business </li></ul><ul><li>By being an ambassador </li></ul><ul><li>Gain credibility in a field </li></ul>Flying with the Angels Why Angels Matter
  18. 18. <ul><li>While the Internet represents a great resource (i.e.,, who you know </li></ul><ul><li>and who they know, still holds the field: </li></ul><ul><li>SCORE </li></ul><ul><li>Business Incubation Network - </li></ul><ul><li>New Jersey Technology Council - </li></ul><ul><li>NJ Entrepreneur - </li></ul><ul><li>Venture Groups </li></ul>Flying with the Angels How to Find Where Angels Fly
  19. 19. <ul><li>New Jersey is well represented by organizations serving the entrepreneur, venture and early </li></ul><ul><li>stage business community. These organizations provide excellent networking opportunities </li></ul><ul><li>for investment, professional services, consulting and employment opportunities. </li></ul><ul><li>New Jersey Entrepreneurs Forum – </li></ul><ul><li>New Jersey Entrepreneurial Network – </li></ul><ul><li>Venture Association of New Jersey – </li></ul>Flying with the Angels The Venture Community in New Jersey
  20. 20. <ul><li>Review of document </li></ul><ul><li>What is the NJEDA? </li></ul><ul><li>What would a conversation with a SCORE representative be without mentioning the SBA? </li></ul><ul><li>What are micro-loans? </li></ul>Flying with the Angels NJEDA Funder List and some Miscellany
  21. 21. Flying with the Angels Volunteering with SCORE Making Dreams Come True SCORE volunteer counselors enjoy a variety of personal rewards. As a SCORE volunteer you: • Provide leadership in the business community • Gain recognition and respect as a business mentor • Enjoy the satisfaction of contributing to the success of the communities you serve • Share in a great experience with other SCORE volunteers • Grow professionally and personally • Participate in lifelong learning • Make new friends To learn more about volunteering with SCORE, visit