Angel 101 mar 31 2014

A n g e l 1 0 1 –
T h e F u n d a m e n t a l s o f A n g e l I n v e s t i n g
I s A n g e l I n v e s t i n g R i g h t f o r Y o u ?

2
• I am Gerard Buckley
– Founder & CEO of Jaguar Capital an Advisory Practice for Growth
Companies in Governance, Financial Management & Financial Structuring
– Chairperson of Board of Directors, Maple Leaf Angels Corporation &
Investor in eight early stage companies
– Certified Corporate Director of the Institute of Corporate Directors
– Previously Entrepreneur in Residence with Incubes (An Internet Company
Accelerator)
– Member of Small & Medium Enterprise Committee of The Ontario
Securities Commission
– Investment Committee of MSV University, Halifax, NS
– 32 yr. Career with Scotia Capital as a Financial Risk Management Advisor to
Fortune 200 Companies: Rogers, Irving Group, Empire Co., Four Seasons,
Bruce Power, OPG, Province of Ontario, Ford etc.
Who Am I
www.mapleleafangels.com | info@mapleleafangels.com | 416.646.6235 | @mapleleafangels

Agenda
• What is Angel Investing
• Who are Angel Investors
• Why would someone be an Angel Investor
• What type of companies do Angels invest In?
• Angel Network in Canada
• Halo Report 2013
• Who is Maple Leaf Angels and what are the benefits
of joining
• Q & A

What is Angel Investing
• Angel Investing is individuals investing their personal
money in the equity or debt of a Early or Growth Stage
Company
• Often referred to as Smart Money, it is where an
individual wishes to invest their time or experience as well
money in a start-up company.
• People wishing to give back their experience so others
may benefit which is often referred to as mentoring or
serving on a company Advisory Board or BOD.
• Angel Investing is Active Investing not Passive

Who is an Angel Investor
• A person prepared to invest their personal or
family money
• A person who can add value to the company
• An accredited investor as defined by OSC
• A member of an angel network
• The majority of angel investment in Canada is
completed by individuals >85%
• Estimate of Cdn Angel Investment is 916mm in
approx 1500 companies (VC about 2b)

Profile of an Angel - Median
Years investing 9
Number of Investments 10
Total Exits 2
Years as a Entrepreneur 14.5
Number of ventures founded 2.7
Age 57
Percent of net worth 10%
Education Masters Degree
Angel Resource Institute Source: Wiltbank Study 2007

Why Would Someone be an Angel
Investor
• Qualified Opportunities
• Opportunity referral
• Increased Capital Diversification
• High Risk Asset Class …. Seeking High Returns
• Favourable Valuation and Terms in comparison to VCs
• Networking
• Portfolio company mentoring or engagement
• Shared Due-Diligence
• Advisory Board and Board of Director Roles

What Type of Companies Do Angels
Invest In?
• Companies who are in seed and early stage.
• In technology, life sciences, ict, health care
devices, med tech, clean tech, power
solutions, fin tech, …..
• Solve a Problem, Secret Sauce or technology
....... USP, validated business model, Great
management team

Equity Capital Life Cycle

What Angels Look For
• High anticipated growth rate – Scalability
• Experienced management team
• Sustainable competitive advantage
• Barriers to entry ie. Exclusive IP
• Clear strategy for commercialization
• Proof of concept or enterprise level validation
• Business model anchored in Reality
• Investor exit strategy in 5 to 8 years
• Investing in what you know – vertical expertise
• Coach ability of the entrepreneur
• Amount of dilutive capital required

Selection Criteria
• Seed investment should be from $250k to $500K and early
stage investments should be from $350k to $1,500K
• Valuation 1 to 3.5 million (Halo 2013 median 2.5m)
• The stage, quality of the management team, valuation
and technology of companies are more important than
the sector criteria
• Quality is more important than quantity
• In Canada 7.3% of companies get funded (93% don’t)
• In Silicon Valley (1/300) get funded

Investment Process
1. Pre-screening – MLA Staff
2. Curbside Mentoring or Individual Member Mentoring
3. Present to Investment Review Committee
4. Present at members meeting
5. Due-diligence Committee is formed and led by a member
6. Term Sheet is negotiated & agreed between parties
7. Investment is papered by lawyer
8. Member is appointed to board
9. Quarterly company reporting
Outlined on MLA Website

Factors that appear to impact investor
outcome
• Due diligence time: More hours of due diligence
positively related to greater returns (> 40 hours)
• Experience: An angel investor's expertise in the
industry of the venture being invested
• Participation: Angel Investors that interacted
with their portfolio companies at least a couple
of times per month mentoring, coaching,
providing leads and monitoring performance
experienced greater returns.

Solo Angel Investing
• Process is time-consuming
– Deal sourcing
– Reading plans (MLA sees 250 Business Plans a year)
– Meeting with entrepreneurs
• Due Diligence is difficult
– Finding Vertical experience
– May require using outside experts
• Legal Support is Expensive
• Most have Family Offices – Super Angels
Angel Resource Institute

Angel Network’s in Canada
• NACO – National Angel Capital Organization
• 32 Angel Groups in Canada
• They have collectively about 1000 to 1500 investors
• Three large groups accounted for 58%
• The majority have fewer than 50 members
• 75% of groups set up since 2007
• Vast majority do volunteer due diligence
• 12 Angel Groups in Ontario
• Keiretsu Forum & Golden Horseshoe Venture Forum are
Private For Profit Angel Groups

Canadian Angel Group Investment
Activity 2012
• 139 Investments in 2012 totaling 40.5 million, an
increase from 2011 of 134 investments and a decrease in
investment from 82.4M
• Average investment is $314k down fr $614k
• 50% of angel groups made over 6 investments in 2012,
an increase of 20% over 2011
• 82% - Ont & Que, 16% West, 2% Atlantic
• ICT (54%), Life Sciences (23%), Clean Tech (10%)
• Valuation – Median 1.55m, Mean 2.06m
• 55% of transactions involved a co-investor

Angel Resource Institute – Halo Report – 2013
• Median Angel Round Size trends up to $700K Q4 from $550K
Q3
• Early Stage Pre-Money Valuations remain stable at $2.5M;
however, top valuations increased from $6.6M to $9.3M
• 72% of deals occur in angel groups’ home states
• 73% of Angel Deals are Syndicated or Co-Invested
• Median Round Size $1.7M up y/y from $1.5M when co-invested
• Share of Deals by Sector - Internet 38.5%(+), Healthcare
19.6%(-), Mobile & Telecom 16.2%(+), Software (non-
Internet/mobile) 4.0%(-)
• Interesting that the top US angel group in 2013 is Golden Seeds
with 300+ members invests predominately in women led &
controlled companies

Maple Leaf Angels Corporation
• Toronto based and in existence since 2007
• MLA has invested in 23 companies since inception in 2007
for $10,000,000 +
• Registered with the OSC as a Exempt Market Dealer
• Currently 38 members
• Open and transparent – published funding process
• Continual Entrepreneur support: Curb Side Mentoring,
Volunteer Mentoring, Entrepreneur Workshops etc.

Maple Leaf Angels - Connects
Our mandate is to connect experienced, accredited investors, and the brightest,
most passionate entrepreneurs in an effective investment process.

Maple Leaf Angels – Membership
Benefits
• Opportunity to engage with other members with investment insights &
ideas
• Give back and make a difference for entrepreneurs through mentoring
and coaching
• Access to collaborative investment opportunities through MLA’s presence
within the startup ecosystem
• Your investment dollars go further through government matching
programs
• You can take advantage of standardized initial screening processes and
thereby benefit from a consistent approach to due diligence
• You can harness the power of syndication that comes about when
multiple members invest together.
• Due diligence support
• You have access to a common term sheet that is negotiated by MLA
members

The Entrepreneur Application Process
• Start with www.mapleleafangels.com
• There is a full education section for
entrepreneurs
• Companies apply using MLA’s Private Platform
• Investment Review Committee
• Monthly Member Investment Meetings
• Due Diligence
• Term Sheet

Contact Information
Gerard Buckley, BBA, FICB, ICD.D
Managing Director
Jaguar Capital Inc.
(C) 416-884-9522
(W) 416-646-6789
g.buckley@jaguarcapital.ca
gerard@mapleleafangels.com
www.jaguarcapital.ca
Twitter: @jaguarcapital
Twitter: @gerardbuckley
Slideshare: Jaguar Capital

Angel 101 mar 31 2014

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