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Startup Stakes: An Early Stage Company Race

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Early Stage Startup Investing as a "horse race".

Early Stage Startup Investing as a "horse race".

Published in: Economy & Finance, Business

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  • 1. “The Startup Stakes”An Early Stage Company Thoroughbred Race “The Startup Stakes” ©2013 Tech Coast Angels
  • 2. “The Startup Stakes”Angel investors and other early stage investorsmight well consider startup company investing a“horse race”:1. The “investment” is their “Bet”.2. The “management” is the “Jockey”.3. The “company” is the “Horse”.4. The target “market” is the “Horse Race”.This presentation considers the “Startup Stakes”,an early stage company thoroughbred race, andstrategies used to hopefully “win, place or show.”….and THEY’RRRRRRE OFF! “The Startup Stakes” ©2013 Tech Coast Angels
  • 3. …someinvestorsbet on “theJockey”… “The Startup Stakes” ©2013 Tech Coast Angels
  • 4. Betting On “The Jockey”These investors consider“the Jockey” may be moreimportant than “the Horse”or “the Race”. “The Startup Stakes” ©2013 Tech Coast Angels
  • 5. Betting On “The Jockey”Founder(s) past successes (exits)Team’s experience & work historySuccess-to-date running companyInvestor’s “gut feel” for team “The Startup Stakes” ©2013 Tech Coast Angels
  • 6. …someinvestorsbet on “theHorse”… “The Startup Stakes” ©2013 Tech Coast Angels
  • 7. Betting On “The Horse”These investors consider“the Horse” may be moreimportant than “theJockey” or “the Race”. “The Startup Stakes” ©2013 Tech Coast Angels
  • 8. Betting On “The Horse”Company product or serviceIntellectual property of companyCompany partners or relationshipsReputation of company in market “The Startup Stakes” ©2013 Tech Coast Angels
  • 9. …someinvestorsbet on “theRace”… “The Startup Stakes” ©2013 Tech Coast Angels
  • 10. Betting on “The Race”These investors consider“the Race” may be moreimportant than “theJockey” or “the Horse”. “The Startup Stakes” ©2013 Tech Coast Angels
  • 11. Betting On “The Race”Invest in one particular market segmentSoftware, Hardware, BioTech etc.Or consumer, enterprise, media products etc.Investor’s unique experience in marketInvestor may see market trends that favor bet “The Startup Stakes” ©2013 Tech Coast Angels
  • 12. …so, what isthe correct“bettingstrategy”? “The Startup Stakes” ©2013 Tech Coast Angels
  • 13. What Is Correct “Betting Strategy”? No “one” absolutely correct “investing strategy”. Strategy as “unique” as each investor/investment. Diversification/portfolio of “bets” should increase odds. Leveraging other investor’s knowledge/due diligence should increase odds.…but sometimes, even with a seemingly great Jockey,riding a terrific Horse in a huge Race… REMEMBER: “The Startup Stakes” ©2013 Tech Coast Angels
  • 14. …moststartupsFAIL!BUT… “The Startup Stakes” ©2013 Tech Coast Angels
  • 15. …someonewill WIN! “The Startup Stakes” ©2013 Tech Coast Angels
  • 16. Worst case,there’llalways beANOTHERrace! “The Startup Stakes” ©2013 Tech Coast Angels
  • 17. Who are the Tech Coast Angels?Tech Coast Angels, www.techcoastangels.com, the largest angel investornetwork in the United States, provides funding and guidance to moreearly‐stage, high‐growth companies in Southern California than any otherinvestment group. Since its inception in 1997, TCA members have focused onbuilding valuable companies, personally invested more than $100M, andhelped portfolio companies attract more than $1B in additional capital, mostlyfrom venture capital firms.TCA members give companies more than just capital; they also providecounsel, mentoring and access to an extensive network of potential investors,customers, strategic partners and management talent.TCA has more than 300 members, including its venture capital affiliates, in fivenetworks in Los Angeles, Orange County, San Diego, Westlake/Santa Barbaraand the Inland Empire. “The Startup Stakes” ©2013 Tech Coast Angels