Angel Investing

Personal Background
25 years AT&T Bell Labs experience
Successful in stock market
Angel investor last 15 years

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

What is Angel Investing ?
Source of funds for early stage companies
Typically first “professional” level
Typically $100,000 to $500,000
Experience / assistance provided

Angel Profile
Usually private
Ability to accumulate capital
Retired professionals
Entrepreneurs
Financial return secondary concern

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

Exit Strategies (descending order)
Chapter 11 / Disbanding
Life style (put option)
Buyout / Merger
Venture Capital round
IPO

How to Find Angels ?

How to Find Angels ?
Networking
Venture groups
Venture fairs
Internet
University lectures
Intermediaries

What do Angels Want to See ?
Short focussed business plan
Quality management / people
Reasonable valuation (20-30% equity)
Market validation

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

Financial Returns
Ten times investment in 3 to 5 years
50% per year
Lifestyle companies do not qualify

Company Culture
Speed, speed, speed
Outsource everything
Leverage / margins
Compete / cooperate
Open non-secretive

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

Evaluation Process
Clear, concise, compelling, coherent one page executive summary
Very large potential (10X)
Intellectually stimulating
Marketing/sales skills
Fundamental keystone patent
Execution capabilities

Negatives
Feature proliferation (unique)
“Problem solution” approach
“Can’t explain must see”
“Enabling” approach
Product not company focus

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

Thank You
John Ason
www.JohnAson.com
[email_address]

Angel Investing

by Kewpie Associates

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Angel Investing

by Kewpie Associates

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1 Embed 197

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Angel Investing Presentation Transcript

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