Vorbild USA: Zahlen - Erfolge - Visionen


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Vorbild USA: Zahlen - Erfolge - Visionen

  1. 1. A Snapshot Of Status and Trends Among Formal American Angel Groups <ul><li>October 8, 2007 </li></ul><ul><li>Dr. Ian Patrick Sobieski </li></ul><ul><li>Managing Director, Band of Angels </li></ul><ul><li>Vice Chairman, Angel Capital Association </li></ul>
  2. 2. Band of Angels <ul><li>Formed 1994, pioneer angel group, 130 Members today </li></ul><ul><li>High Tech Background Only, ex-CEOs or founders of : Symantec, Logitech, National Semiconductor, Intel, Sun, Apple, etc. </li></ul><ul><ul><li>60+ Media articles focused on Band; 3 Harvard Business School cases </li></ul></ul><ul><li>Meet monthly at Los Altos Country Club, Silicon Valley </li></ul><ul><li>Track Record </li></ul><ul><ul><li>Invested $160M in 220 Startups; </li></ul></ul><ul><ul><ul><li>9 IPOs, all listed on Nasdaq </li></ul></ul></ul><ul><ul><ul><ul><li>Digital Think 40:1 </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Keynote Systems 20:1 </li></ul></ul></ul></ul><ul><ul><ul><li>40 Positive M&A Exits </li></ul></ul></ul><ul><ul><ul><ul><li>Sandpiper Networks 30:1 </li></ul></ul></ul></ul><ul><ul><ul><li>53% IRR since inception! </li></ul></ul></ul><ul><ul><li>Average Deal Size: ~$500k </li></ul></ul><ul><ul><li>4,000 jobs created </li></ul></ul><ul><ul><li>Ranked by PWC in top 10 of top 100 VCs in USA for 2002  2007 </li></ul></ul><ul><li>Pioneered Side Fund Model: $50M side fund with institutional investors including 2 major University endowments, TVM, and Siemens. </li></ul>
  3. 3. 130 pairs of eyes Reviewed by Pre-Screening Committee (~35 members) Reviewed by Screening Committee (~6 members) Dinner Meeting (~40 members) Follow up Luncheon And ad hoc diligence (>5 members) Individual Investment Decision but Coalition Negotiation; Board Assignment Fund Investment Decision ~50 deals/month 10 deals/month 3 deals/month ~1 deal/month Angel Groups Perform Sourcing and Screening in a New Way
  4. 4. Growth in North American Angel Organizations Sources: Center for Venture Research (pre 03 data) and Kauffman Foundation/ACEF (04-06 data)
  5. 5. Summary of ACA Membership – August, 2007 Full Members 124 Provisional Members 11 Investors in Operating Groups 6,000 States & Provinces 43 Affiliate Organizations 17 International Partners 2
  6. 6. Investors Per Group Source: ACA Conf survey and membership applications - 116 groups reporting (2006-2007) Average = 44 Median = 38 Percent of Groups
  7. 7. Some of the Largest American Angel Groups <ul><li>Organization Accredited Investors </li></ul><ul><li>TechCoast Angels ( Southern California ) 280 </li></ul><ul><li>North Dallas Investment Group ( Dallas ) 250 </li></ul><ul><li>Alberta Deal Generator ( Calgary/Edmonton ) 194 </li></ul><ul><li>Investors’ Circle ( national ) 185 </li></ul><ul><li>Ohio TechAngels ( Columbus ) 150 </li></ul><ul><li>Band of Angels ( Silicon Valley ) 130 </li></ul><ul><li>ZINO Society ( Seattle ) 125 </li></ul><ul><li>Pasadena Angels ( Pasadena ) 114 </li></ul><ul><li>Alliance of Angels ( Seattle ) 100 </li></ul><ul><li>North Coast Angel Fund ( Cleveland ) 99 </li></ul>
  8. 8. Affiliates Full Members Provisional Members Members and Affiliates – August, 2007
  9. 9. Source: 2007 ACA Angel Group Confidence Survey 2006 Group Investment Data <ul><li>72% co-invested with venture capital firms </li></ul><ul><li>29% had distributions to investors </li></ul><ul><li>Investment up 23% from 2005 </li></ul>
  10. 10. Average Size Investment Per Round Percent of Groups Source: 2007 ACA Angel Group Confidence Survey
  11. 11. Investment Preference Source: ACA Conf Survey and Membership applications - 86 groups reporting (2006-2007) Percent of Groups
  12. 12. Revenue Sources for Group Operation Source: ACA Conf survey and membership applications – 105 groups reporting (2006-2007) Percent of Groups Ec dev – Group receives money from state or local government In-Kind – Group receives support from “parent” entity Other – Half supported by management fees for funds
  13. 13. Annual Member Fees Average = $1,135 Median = $1,000 Source: ACA Conf survey and membership applications – 116 groups reporting (2007)
  14. 14. 2007 Prediction: How Many New Companies Will You Invest In? Source: 2007 ACA Angel Group Confidence Survey Percent of Groups Companies
  15. 15. New Trend: Raise a Side Fund Source: 2007 ACA Angel Group Confidence Survey Percent of Groups
  16. 16. Why? Sustainibility… <ul><li>External Threats </li></ul><ul><ul><li>Competition from Small VCs, individual angels, and other angel groups </li></ul></ul><ul><li>Internal Threats </li></ul><ul><ul><li>Members become inactive, members quit </li></ul></ul><ul><ul><li>Leader becomes tired </li></ul></ul><ul><ul><li>Incentives are misaligned </li></ul></ul><ul><ul><li>No Liquidity to Members </li></ul></ul><ul><li>Answer to all these is to provide better services </li></ul><ul><ul><li>Web site, reputation, deal screening </li></ul></ul><ul><ul><li>Better terms through pooled negotiation </li></ul></ul><ul><ul><li>Collective due diligence </li></ul></ul><ul><ul><li>Member Education </li></ul></ul><ul><ul><li>Professional manager help </li></ul></ul><ul><ul><li>Networking & social events </li></ul></ul><ul><ul><li>Formalize relationship with VCs </li></ul></ul><ul><ul><li>Institutional Support (memory, data) </li></ul></ul><ul><li>This is a lot of work! How to pay for it? </li></ul>
  17. 17. Potential Sources of Cash <ul><li>Percentage of transactions </li></ul><ul><li>Charge Companies to submit and/or present </li></ul><ul><li>Membership Dues </li></ul><ul><li>Sponsorship </li></ul><ul><li>Management Fees on Fund </li></ul>
  18. 18. Potential Sources of Cash Continued… <ul><li>Percentage of transactions (3->5%) </li></ul><ul><ul><li>Pros: $5M investment = $250,000 </li></ul></ul><ul><ul><li>Cons: probably illegal </li></ul></ul><ul><li>Charge Companies to submit and/or present </li></ul><ul><ul><li>Filing fees ($50  $250), Presentation Fees ($100  $3000) </li></ul></ul><ul><ul><li>Pro: 36 deals/year = $108,000/year </li></ul></ul><ul><ul><li>Cons: Selection Bias </li></ul></ul><ul><li>Membership Dues TAM: $150,000 </li></ul><ul><li>Sponsorship TAM: $150,000 </li></ul><ul><li>Total TAM of all these approaches: $658,000 </li></ul>
  19. 19. Potential Sources of Cash Continued… <ul><li>Management Fee on $20M Fund: $500,000 </li></ul><ul><ul><li>Provides 10 year sustainable cash flow </li></ul></ul><ul><ul><li>Use of fees can provide useful services to members </li></ul></ul><ul><ul><li>Carried interest extra source of value </li></ul></ul><ul><ul><li>Aligns Manager and Member interests </li></ul></ul><ul><ul><li>Band of Angels great case study </li></ul></ul><ul><li>Manager led Side Fund </li></ul><ul><ul><li>Manger raises funds from others invests alongside angels, and subsidizes group </li></ul></ul><ul><li>Manager led Pooled Fund Network </li></ul><ul><ul><li>Members contribute to fund and deploy capital by majority vote </li></ul></ul>
  20. 20. May 2007 Source: Membership Applications, 2006-2007 Angel Networks Networks w/Sidecar Funds Angel Funds ACA Membership: Networks and Funds 99 12 17
  21. 21. Personal Predictions <ul><li>A “standard” business model will develop for angel groups </li></ul><ul><li>Some mix of fee, fund, and sponsor </li></ul><ul><li>Rise of a class of managers </li></ul><ul><li>Some kind of economic sharing across entire group </li></ul><ul><li>Hybrid angel groups that have many properties of angel groups as we know them but the stability, longevity, and upside economics of VC Funds </li></ul><ul><li>When a model has been developed and is common and “standard”; when there is third party data to report IRR performance of groups; Angel Investing will be an Industry </li></ul><ul><li>But then the last question: Will this still be fun? Do angels want to let this happen? </li></ul>
  22. 22. Potential Angels in the United States 4,200,000 3 study Estimates of Informal Investors Investors in angel groups Center for Venture Research - Active Angels (est.) U.S. Millionaires 1,000,000 225,000 10,000
  23. 23. Angel Capital Association <ul><li>Annual Summit – professional development </li></ul><ul><ul><li>May 7-9, 2008 in San Diego, CA </li></ul></ul><ul><li>Regional Meetings (co-investment, networking) </li></ul><ul><li>2007 Angel Group Confidence Report ( semi-annual ) </li></ul><ul><li>SEC accreditation proposal feedback </li></ul><ul><li>Weekly PR, speaking engagements </li></ul><ul><li>Discounts on Power of Angel Investing programs </li></ul><ul><li>Branding, membership directory, recruit recommendations </li></ul><ul><li>Members’ Only Web site </li></ul><ul><li>www.angelcapitalassociation.org </li></ul>
  24. 24. Need More Information? Ian Patrick Sobieski, Ph.D. Managing Director, Band of Angels Vice Chairman, Angel Capital Association 535 Middlefield Rd., Suite 190 Menlo Park, CA 94025 650.321.2221 [email_address] www.bandangels.com