Summit 05 Presentations 07e Davis, Laurie

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Summit 05 Presentations 07e Davis, Laurie

  1. 1. OAA Overview Laurie Davis [email_address]
  2. 2. What is the problem? <ul><li>Seed stage companies typically require $0.5M to $2M (cash flow positive or VC) </li></ul><ul><li>Finding enough Angels willing to invest is inefficient and time consuming </li></ul><ul><li>Risk mitigation is beyond the scope of individual angels </li></ul><ul><ul><li>Significant effort required to review prospects </li></ul></ul><ul><ul><li>Due diligence requires very diverse skills </li></ul></ul><ul><ul><li>Diversification limited by areas of expertise </li></ul></ul>
  3. 3. OAA Roots Purple Angel Band of Scoundrels Ottawa Angel Alliance Individual Angels VCs OAA formally launched in January 2005
  4. 4. Due Diligence & Effort <ul><li>Formalized process & VC grade due diligence </li></ul><ul><li>Pip elin e mgmt (~600 hrs to complete a deal) </li></ul>40 Business plans reviewed 80 hours 10 Detailed screening 120 hours 3 Detailed due diligence 300 hours 1 Deal creation 100 hours
  5. 5. Portfolio Diversity <ul><li>Research suggests a portfolio of 7-10 early stage deals to achieve target returns </li></ul><ul><li>Different asset classes </li></ul><ul><li>VC and non-VC type deals </li></ul><ul><ul><li>Size of investment </li></ul></ul><ul><ul><li>Exit strategies </li></ul></ul>
  6. 6. Operational Model <ul><li>Not a fund.. All investments are individual </li></ul><ul><li>Alliance formally incorporated as a not for profit </li></ul><ul><li>4-6 deal review sessions (evenings) </li></ul><ul><li>Quarterly communication on company status </li></ul><ul><li>Professional development sessions </li></ul>
  7. 7. Initial Objectives of OAA <ul><li>Establish a membership of a minimum of 50 angels and 2 VCs </li></ul><ul><li>Establish workable processes </li></ul><ul><li>Invest in at least 4 quality deals in 2005 </li></ul>
  8. 8. Membership <ul><li>1 angel group </li></ul><ul><ul><li>Purple Angel (10 members) </li></ul></ul><ul><li>25 individual angels </li></ul><ul><li>3 VC firms </li></ul><ul><ul><li>BCE Capital </li></ul></ul><ul><ul><li>Vengrowth </li></ul></ul><ul><ul><li>Ventures West </li></ul></ul>
  9. 9. Portfolio <ul><li>$360K </li></ul><ul><li>$400K </li></ul><ul><li>BDC co-investment of $1,000K </li></ul><ul><li>$160K </li></ul><ul><li>TAG co-investment of $100K </li></ul><ul><li>Total $920K </li></ul>Knowledge in Power TM
  10. 10. Challenges Ahead <ul><li>Increase membership </li></ul><ul><li>Make VC partnership model work </li></ul><ul><li>Reduce investment cycle to 3 months </li></ul><ul><li>Consider raising sidecar fund </li></ul>

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