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  • Jamie Zanios: Brief Intro Comments Introductions of Initial Investors Present Introduce: Steve Mercil
  • Jamie Zanios: Brief Intro Comments Introductions of Initial Investors Present Introduce: Steve Mercil
  • Terry Cobb
  • Terry Cobb
  • Steve Mercil
  • Steve Mercil
  • Steve Mercil
  • Steve Sukup
  • Steve Sukup
  • Steve Sukup
  • Jamie Zanios
  • Jamie Zanios
  • Jamie Zanios Closing Comments: Denny Henningsen
  • Jamie Zanios: Brief Intro Comments Introductions of Initial Investors Present Introduce: Steve Mercil
  • Jamie Zanios: Brief Intro Comments Introductions of Initial Investors Present Introduce: Steve Mercil
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    1. 2. Crossroads Institute Gary Larrowe Extension Specialist VA Tech
    2. 4. <ul><li>Fund Goal: $1,000,000 </li></ul><ul><li>25-40 investors </li></ul><ul><li>Minimum investment required $500,000 to complete fund. </li></ul>
    3. 5. Individual Investment <ul><li>Minimum Investment $10,000 </li></ul><ul><li>Maximum Investment $100,000 </li></ul><ul><ul><li>10% due with subscription </li></ul></ul><ul><ul><li>Balance or part of balance due when capital call is made by the Company. </li></ul></ul>
    4. 6. Current Indications of Interest <ul><li>Several Individuals in Carroll County have been used as barometers of interest with positive feedback </li></ul><ul><li>Closing fund at $1.5 million or October 31, 2004 whichever comes first! </li></ul>
    5. 7. Crossroads Venture Capital Fund, LLC <ul><li>Formal Investment Fund </li></ul><ul><li>Aggregate Intellectual & Financial Resources </li></ul><ul><li>Comprised of Accredited Investors </li></ul><ul><li>Managed by formal Board of Managers </li></ul>
    6. 8. Investment Motivation <ul><li>Return on Investment </li></ul><ul><li>Angel Investor opportunities </li></ul><ul><li>Economic Development </li></ul><ul><li>Reduce Risk </li></ul><ul><li>No Sales Commission or other Dilution of Investment and possible tax credits </li></ul>
    7. 9. Investment Motivation <ul><li>6. Limited Management Expenses, more in early years during due diligence </li></ul><ul><li>7. Some Legal and Accounting </li></ul><ul><li>8. Local Control </li></ul><ul><li>9. Regional Economic Power </li></ul>
    8. 10. Return on Investment <ul><li>Ideally, the angel fund will have a blended portfolio and receive a weighted return of up to 20% compounded annually. </li></ul><ul><li>Expectations for Return on Investment within 5 years. </li></ul><ul><ul><li>Startup Companies 10x </li></ul></ul><ul><ul><li>Companies less than one year old 6x </li></ul></ul><ul><ul><li>Companies one to five years 5x </li></ul></ul><ul><ul><li>Companies five years plus 3x </li></ul></ul>
    9. 11. Life of Fund <ul><li>Will invest all funds less a reserve for operating expenses </li></ul><ul><li>Investment period 2-4 years </li></ul><ul><li>Expected term 5-7 years </li></ul><ul><li>End of term, close fund and disburse remaining assets </li></ul><ul><li>Open new fund if necessary </li></ul>
    10. 12. Crossroads Venture Capital Fund, LLC <ul><li>Investment Focus to be Determined by Members: </li></ul><ul><li>Will consider most industries to include : </li></ul><ul><ul><li>Manufacturing, Technology, Life Sciences, Warehousing </li></ul></ul><ul><ul><li>and Distribution </li></ul></ul><ul><li>Will consider various growth stages of a business: </li></ul><ul><ul><li>Seed, Early Stage, Start-Ups, Expansions, Owner Transitions </li></ul></ul><ul><li>Primary Investment Region: </li></ul><ul><ul><li>Service area of Crossroads Institute </li></ul></ul><ul><li>Will consider investments outside the region. </li></ul>
    11. 13. Crossroads Venture Capital Fund, LLC <ul><li>Investment Expenses to be Determined by Members: </li></ul><ul><li>Will consider reimbursement fee for due diligence efforts of members ( Preferably Non Cash: stock options or % of deal ) </li></ul><ul><li>In some cases may hire due diligence to be performed </li></ul><ul><li>Goal to limit expenses to increase return on investment </li></ul>
    12. 14. Management <ul><li>Members </li></ul><ul><ul><li>Investment Decisions </li></ul></ul><ul><ul><li>Elect Board of Managers </li></ul></ul><ul><ul><li>One vote per share </li></ul></ul><ul><ul><li>Assist with deal flow </li></ul></ul><ul><ul><li>Due Diligence </li></ul></ul><ul><li>Board of Managers </li></ul><ul><ul><li>Direct Due Diligence on investment opportunities </li></ul></ul><ul><ul><li>Decision makers for the Company </li></ul></ul><ul><ul><li>Elected by the Members </li></ul></ul><ul><li>Officers </li></ul><ul><ul><li>Elected by the Board of Managers </li></ul></ul><ul><ul><li>Day-to-Day mgmt responsibilities </li></ul></ul><ul><li>Crossroads Institute </li></ul><ul><ul><li>Administrative Support </li></ul></ul>
    13. 15. Board of Managers: Cross Section of Disciplines <ul><li>Financial/Banking </li></ul><ul><li>Accounting </li></ul><ul><li>Legal </li></ul><ul><li>Operations </li></ul><ul><li>Marketing </li></ul><ul><li>Human Resources </li></ul><ul><li>Risk Management </li></ul><ul><li>Medical </li></ul><ul><li>Industry Expertise </li></ul><ul><ul><li>Advanced Manufacturing </li></ul></ul><ul><ul><li>Technology </li></ul></ul><ul><ul><li>Distribution </li></ul></ul><ul><ul><li>Warehousing </li></ul></ul><ul><li>Due Diligence </li></ul>
    14. 16. Crossroads Institute <ul><li>Administrative Support </li></ul><ul><ul><li>Call meetings </li></ul></ul><ul><ul><li>Assist Officers and Board of Managers </li></ul></ul><ul><li>Coordinate Due Diligence Efforts </li></ul><ul><ul><li>Assist with preliminary research </li></ul></ul><ul><ul><li>Resources for research </li></ul></ul><ul><li>Assist in other areas as needed </li></ul><ul><li>Stimulate Deal Flow </li></ul>
    15. 17. Critical Functions <ul><li>Deal Flow </li></ul><ul><li>Crossroads Entrepreneurs </li></ul><ul><li>Establish connections with other Venture Funds and Firms </li></ul><ul><li>Venture Capital Firms </li></ul><ul><li>MEMBERS </li></ul><ul><li>Due Diligence </li></ul><ul><li>Team Approach </li></ul><ul><li>Board of Managers and Members </li></ul><ul><li>Outside Expertise </li></ul><ul><li>Due Diligence Work Plan </li></ul>
    16. 18. Next Steps… <ul><li>Within three months: Complete and Sign Subscription Agreement return with check for 10% of subscription amount to the Crossroads Institute </li></ul><ul><li>Close Private Placement Offering Memorandum 10/31/04 or at $1.5 million </li></ul><ul><li>Annual Meeting to Elect Board of Managers 11/04 </li></ul><ul><li>Cash Checks 11/04 </li></ul><ul><li>Begin Deal Flow </li></ul>
    17. 20. www.CrossroadsVA.org

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