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  • 1. Angel Investing
  • 2. Personal Background
    • 25 years AT&T Bell Labs experience
    • Successful in stock market
    • Angel investor last 15 years
  • 3. Angel Investments
    • Xlibris.com Dygest.com DoodleDeals.com
    • Kodingen.com SiteSimon.com ERANYC.com
    • Centrak.com OffTrackPlanet.com Ology.com
    • Diapers.com HotList.com SocialFeet.com
    • CallunaVineyards.com Pogby.com Spling.com
    • CarbomNanoProbes LiveLook.com Bikini.com FulcrumGallery.com Geometrix SpatialLabs AdPilot Hooja MotionMathGames.com
    • MakeUsAnOffer PhlatBall.com IvyExec.com
  • 4. What is Angel Investing ?
    • Source of funds for early stage companies
    • Typically first “professional” level
    • Typically $100,000 to $500,000
    • Experience / assistance provided
  • 5. Angel Profile
    • Usually private
    • Ability to accumulate capital
      • Retired professionals
      • Entrepreneurs
    • Financial return secondary concern
  • 6. What do Angels Want ?
    • A pleasant experience
      • Excitement of growing a company
      • Financial return
    • An environment to contribute / participate
      • Management / oversight
      • Contacts
    • An exit strategy
  • 7. Exit Strategies (descending order)
    • Chapter 11 / Disbanding
    • Life style (put option)
    • Buyout / Merger
    • Venture Capital round
    • IPO
  • 8. How to Find Angels ?
  • 9. How to Find Angels ?
    • Networking
      • Venture groups
      • Venture fairs
      • Internet
      • University lectures
    • Intermediaries
  • 10. What do Angels Want to See ?
    • Short focussed business plan
    • Quality management / people
    • Reasonable valuation (20-30% equity)
    • Market validation
  • 11. Negotiating with Angels
    • Must be win / win
    • Process is asymmetrical
      • Valuations fuzzy
      • Angel contribution fuzzy
      • Angels timeframe is casual / slow
      • Angels do not HAVE to invest
      • Angels can walk away at anytime
  • 12. Financial Returns
    • Ten times investment in 3 to 5 years
    • 50% per year
    • Lifestyle companies do not qualify
  • 13. Company Culture
    • Speed, speed, speed
    • Outsource everything
    • Leverage / margins
    • Compete / cooperate
    • Open non-secretive
  • 14. Angels VS VCs Low High Risk 2X – 4X 10X Multiples 30% 50% IRR Expansion Early Stage Complete Partial Management $2 – 5 million None Revenues Other people’s Own Money
  • 15. Evaluation Process
    • Clear, concise, compelling, coherent one page executive summary
    • Very large potential (10X)
    • Intellectually stimulating
    • Marketing/sales skills
    • Fundamental keystone patent
    • Execution capabilities
  • 16. Negatives
    • Feature proliferation (unique)
    • “Problem solution” approach
    • “Can’t explain must see”
    • “Enabling” approach
    • Product not company focus
  • 17. Exploding Angel Market
    • Starting a company close to zero
    • Validating a company close to zero
    • Emergence of accelerators
    • Emergence of Super Angels (Micro VCs)
    • Emergence of AngelList
    • Emergence of graphical investor decks
    Dramatic increase in speed of angel investing
  • 18. Thank You
    • John Ason
    • www.JohnAson.com
    • [email_address]