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Rob Wiltbank - Presentation to Tacoma Angel Network
 

Rob Wiltbank - Presentation to Tacoma Angel Network

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Title: The Economics of Creative Destruction or Making money from growing things ...

Title: The Economics of Creative Destruction or Making money from growing things

Wiltbank is the foremost leader on Angel Investment Outcomes.

His Book, The Catalyst, is available on Amazon @ http://www.amazon.com/Catalyst-Become-Extraordinary-Growth-Leader/dp/030740949X

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    Rob Wiltbank - Presentation to Tacoma Angel Network Rob Wiltbank - Presentation to Tacoma Angel Network Presentation Transcript

    • The Economics of Creative Destruction or Making money from growing things
      • Angel Investment Outcomes
      • Key Strategic Choices
      • The Catalyst
      Robert E Wiltbank, Ph.D. Associate Professor of Strategy & Entrepreneurship Willamette University Partner, Buerk Dale Victor LLC 503 715 7894 [email_address]
    • Distribution of Returns by Venture Investment Red Bars: U.K. % of exits in that Category Blue bars: U.S. % of exits in that Category UK: Overall Multiple: 2.2X Holding Period: 3.6 years US: Overall Multiple: 2.6X Holding Period: 3.5 years Approx 22% IRR Approx 27% IRR Hold: 3.0 yrs. Hold: 3.3 yrs. Hold: 4.6 yrs. Hold: 4.9 yrs. Hold: 6.0+ yrs.
      • Entrepreneurial expertise is significantly related to better outcomes.
      • Particularly true in earlier stage investments.
        • Angels with entrepreneurial experience do significantly better in early stage deals than investors with less experience. (0/1/2 ventures, vs. 3 or more)
      • Expertise in the industry of the venture also valuable.
        • Significantly related to a reduction in investment failure
      Investor Expertise
    • 60% better multiple for deals related to industry expertise
      • Interaction: hi interaction had significantly less failure
        • Low interaction failed 61% of the time
        • Hi interaction failed 44% of the time
      • Board Role: related to better returns
        • The largest effect size in regressions
      • Passive vs. Active
        • Passive was significantly related to smaller investments and worse returns
      • Managerial Role: more participation isn’t always better
        • While only about 15% of exits, where an angel was involved in a managerial role, returns were significantly less attractive.
      Participation post investment
    • 4X better multiple to Board Involvement
    • 2X better multiple for 20+ due diligence
    • Follow-On Investment from Same Angel Investor 3X better multiple in deals where the investor did not make a follow-on investment. 30% of deals had follow on investments.
      • Not Rocket Science: Just good business.
        • Staying connected to your expertise is a good idea.
        • Even a relatively small amount of due diligence helps avoid failure.
        • Interaction post-investment is valuable to a point.
        • Follow-on investments are significantly related to lower returns.
      Better angel investing
      • Based on an in Depth Study of 50 Corporate Leaders that led incredible revenue growth projects.
        • NOT a book about organizing, conceptualizing, or considering growth
        • A book that gets into the specifics of leading growth when you are on the hook
        • Lesson 1 : Don’t look up look in
        • Lesson 2 : The monkey isn’t on your back, it’s in your head
        • Lesson 3 : It’s already there: reframe to find it
        • Lesson 4 : Small is beautiful
        • Lesson 5 : Lead with pragmatic idealism
        • Lesson 6 : Speed Thrills
        • Crown Publishing: NY, NY
    • A Passion for Two Worlds
      • Irony
        • Entrepreneurs wish they were the incumbent.
        • Incumbents wish they were more entrepreneurial.
      • Growth Leaders live at the intersection of these two worlds
          • … .and love it.
    • mix the best of both worlds
      • Co-Create with Early Yes’s
      Leverage Your Organization Small Bets … Fast Pragmatic Leadership Design for Scale Enter with Competitive Intent YES Entrepreneurial World Corporate World The Catalysts