North Angels Overview For Investors 1232041470294305 1

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North Angels Overview For Investors 1232041470294305 1

  1. 1. © 2008 North Venture Partners, LLC | www.dontgosouth.com | www.northangels.com
  2. 2. 1.0 For innovation to solve the problems of tomorrow, we must support it today. Creating remarkable social and economic returns from helping build a successful new business is certainly a worthy goal, but if we don’t address the inefficiencies in how new companies are being created, those same social and economic aspirations could be at serious risk. The good news? It’s not too late. There’s still time for us to suit up, make a difference, and seize the opportunity to get in the game. We’re ready if you are.
  3. 3. What is Early Stage Private Equity? The creation of new companies is essential for economic growth. This growth is driven by investors like yourself who are willing to brave the elements and steeper odds to invest their time and capital to help inspire game-changing innovation. 2.0 By empowering private investors and forward-thinking entrepreneurs, we believe we can thrive in a space where banks and VCs fear to tread.
  4. 4. Why Invest In Early Stage Private Equity? Most Angel investors have a balanced portfolio. Often “higher risk” holdings in these portfolios are correlated to the same market as their more quot;securequot; portfolio holdings (i.e. leveraged hedge fund trading public equities). One strong advantage to uncorrelated assets (equity in a private company) is the insulation they provide from overall market shifts, while maintaining the original high risk/return structure. 3.0 Note: Responsible Angel investing would likely account for no more than a small percentage (1-3%) of an investors total portfolio. Combined with the potential financial returns, the quot;emotional returnsquot; you can get from playing a role in building a successful business makes Angel investing that much more rewarding.
  5. 5. Searching For The Secrets To Success. Three years ago North was created by a group of former Virgin executives who left the Richard Branson empire to focus on building holistic solutions for the early stage investing marketplace. Instead of sitting back and waiting for the investing climate to correct itself, we decided to pool our resources, skill sets, and imaginations to pave a revolutionary new path for fostering tomorrow’s innovation. 4.0 North is a boutique private equity advisory and consulting firm focused on accelerating the growth of innovative early stage ventures. The story behind North begins with a rather powerful discovery. Our team spent several years seeking the best methods, techniques, and information that we could find to empower ourselves to make smarter, more profitable investment decisions for our clients, our investors, and ourselves. While searching for “the key” to what critical factors influence the success of early stage venture investments, we found something rather simple, yet profound. By focusing our efforts and business on unlocking this single friction point, we could impact the growth curve of entire industry (perhaps even the entire economy) in a remarkable way.
  6. 6. Secret Discovered: 360o Due Diligence. Solid due diligence is absolutely crucial for investing success, it’s what guides investors decisions, builds trust that enables investment, and ultimately, it’s the single largest factor in the overall success of Angel investing. So what’s the catch? Effective due diligence can be both expensive and exhausting. But in order to make smart decisions, there are no short cuts. Take a look at the Kauffman Foundation research below and you’ll see why. 5.0 “Comparing investors who spent less than the median 20 hours of due diligence and investors who spent more, shows an overall multiple difference of 5.9X for those with high due diligence compared to only 1.1X for those with low due diligence.” Excerpt taken from “Returns to Angel Investors in Groups”, a comprehensive study of 539 Angel led investments. Robert Wiltbank, Ph.D. and Warren Boeker, Ph. D., 11/2007. Whether you are an entrepreneur betting your career, or an Angel investor betting your capital on an exciting new venture, what type of return on investment are you seeking? 590% or 110%?
  7. 7. Seeing The Opportunity We Planned Our Attack. North is predominantly a best-in-class venture analysis firm which leverages our exposure to venture investments and market research to identify outstanding opportunities in the early stage private equity market. 6.0 North strengthens the entire early stage private equity market by providing superior due diligence on the highest quality opportunities. North filters several hundred new ventures every month down to a handful of strong candidates. We then generate in-depth due diligence reports for roughly 8% of the total number of deals that are submitted to our team. We publish (via email) the top 3-5 scoring investments to our Angel Group members who then indicate their level of investment interest in a reply email.
  8. 8. Introducing World-Class Due Diligence. North provides access to services that individual investors or groups could rarely afford. If deep due diligence is the key to inspiring innovation, preventing losses, and unlocking higher return; then investors must leverage a dedicated team of analysts with well-trained eyes. 7.0 North delivers a dedicated team of analysts and a disciplined & proprietary methodology for scoring, evaluating, and selecting new venture investments. The end result; the Venture 360 Report. What we have built is a comprehensive process for new venture evaluation based upon best-in-class methodologies, research, and comparative data analysis techniques. The benefits of the Venture 360 Report are two-fold: 1) Angel investors can make highly informed decisions quickly, and with confidence. 2) Entrepreneurs get rare and insightful feedback on their business from the perspective of an investor.
  9. 9. Up Close Evaluation; There Is No Substitute. Conducting the market research, background checks, reference calls, and financial modeling that are required to effectively understand a new venture is back breaking work. North utilizes software, systems, and processes to produce reliable, high quality due diligence reports quickly and consistently. 8.0 From deconstructing the financials to target market analysis; the strengths and weaknesses of each venture opportunity are reviewed in detail so investors and entrepreneurs can make decisions based on reliable data, not just intuition. 20+ Pages of Rigorous Insights & Scoring Comparative Graphing & Performance Chart & Due Diligence Across 8 Categories Written Analysis Executive Summary
  10. 10. Decisions Based On Data, Not Drama. Utilizing a combined human and database-driven due diligence process, North analysts score thousands of ventures across 80 categories, resulting in finely tuned analysis and insights across all critical aspects of each venture. North also contracts with Lexis Nexis® for additional background checking on potential issues that could affect the investment decision. 9.0 The North Venture 360 Report is a comprehensive document that cuts through the subjective spin of any business plan, arming investors with the supportive data they need to make a more informed investment decision. Eliminates Risk: Entrepreneurs and investors might not like what their report has to say, but everyone should realize that neither investors, entrepreneurs, or North are well served by spending weeks, or months trying to move a venture forward if it is fundamentally flawed. Accelerate The Venture: An objective third party analysis can either quickly generate conversations with investors, or it can give an entrepreneur the direct and honest feedback they need to dig in and re-tool their business to put it on the right path.
  11. 11. Secret #2? Fishing In A Bigger Pond. In our effort to provide Angel investors with the best possible deal flow, North has created an ingestion portal through which entrepreneurs submit their applications for funding. By aggregating a large pool of deals, most investors gain the advantage of filtering through a much larger pool of opportunities. 10.0 Thousands of entrepreneurs flock to North because we offer up something different; a kindred spirit who provides objective & honest feedback on their business and gives them a better shot at funding. Through this superior deal flow, our extraordinary reach into the world of innovation, our robust online systems, and the clarity provided by the North Venture 360 Report, we’re able to make Angel investing more educated, empowering, and rewarding. Our partners and group members are benefactors of this quality deal flow, as all they have to do is simply subscribe to receive an email of the “best of the best” of new ventures we screen each month.
  12. 12. Chances Are We’ve Got You Covered Our comfort zone covers roughly 85% of all new ventures we see. While our roster is deep enough to cover the most common areas of innovation, we can’t provide reports on everything under the sun. If a venture falls outside of our coverage, we’ll probably have to wave the white flag and refer the entrepreneur to a subject matter expert. Venture 360 Reports are completed in 5-10 business days and are scheduled on a first come first served basis. 10.0 North provides Venture 360 reports across 8 broad markets enabling us to cover about 85% of submissions. For each industry there are various North Market Coverage economic models, industry standards, and consumer behaviors. Each of these unique Media & Entertainment factors is incorporated into the venture Consumer Products & Services evaluation. The strength and accuracy of the North database of reviewed ventures is Software & IT Services enhanced by our market segmentation. Mobile Devices & Applications Note: The overall scoring and analysis output is calibrated to seek the greatest Business Products & Services possible economic return regardless of Retail / Distribution market sector. Sustainable Industries / Energy
  13. 13. Flipping The Cost/Benefit Relationship. Historically the deal screening and due diligence expense has rested on the investor’s shoulders. When the most common response entrepreneurs hear is “No Thanks” in the form of a template rejection letter, why would it warrant any investment on behalf of the entrepreneur? North, having sat on both sides of the pitch table, built a system that completely changes the value an entrepreneur gets from the funding application process. We discovered that by dramatically enhancing the value an entrepreneur receives from the application process (20+ pages of detailed analysis of their venture’s strengths and weaknesses), investors can shift the cost of due diligence back onto the shoulders of the quot;sell sidequot; of the equation. 12.0 By turning a form rejection letter into something actually worth paying for, the due diligence cost paradigm has been completely inverted. What this new paradigm means is that Angel investors can now receive the benefit of world class due diligence with no impact on their operating budgets. The value of the North Venture 360 Report is clear for entrepreneurs, it’s an insightful tool that gives their venture the best possible shot at being considered for funding. Worst case, if rejected, the Venture 360 Report provides triage of what they need to do to fix their business and make it more quot;investor readyquot;.
  14. 14. Angel Investors Should Walk Their Talk. Smart entrepreneurs look for investors who don’t hide behind old sayings like “the cobblers kids have no shoes”. Our team understands what it means to pour everything you’ve got (and then some) into your business. We wouldn’t ask an entrepreneur to do anything we wouldn’t first be willing to do ourselves. 13.0 At North, inspiring innovation is not a hobby, it’s our full-time mission. By working together when we win, we win more. And when we lose, we lose less. North Angels operates using process and data driven due diligence tools coupled with web based information management software designed to streamline our operations and enable global scale. North is driven to operate faster with greater efficiency, and far less overhead than any other Angel investment group.
  15. 15. How Will North Impact Your Life? Ultimately the time and amount you’re involved is completely up to you. We do not hold mandatory meetings, we don’t run a social club, and we do not have required investment minimums. We don’t even charge annual dues. What we do provide is a fresh pool of possibilities. If you want to jump in, great. If you wish to hang back and watch from the stands, we’re fine with that too. 14.0 Many of our Angels enjoy the opportunity to be a board member, to mentor aspiring young entrepreneurs, or simply to keep their own business skills sharp. The bottom line, working with new ventures can be a lot more hands on than a hedge fund could ever be. Angel investing is not easy, nor is it for the timid or weak. What we do is hard, and it takes guts and courage. Or as we like to say, it takes North swagger. By striving for greatness, we will undoubtedly stumble. But if our mission is true, we cannot lose.
  16. 16. We’re All On The Same Team. We work hand-in-hand to team you up with tomorrow’s most forward-thinking entrepreneurs to build amazing new companies. We seek to support innovation through the most difficult challenge in all of business: from zero to a million. 15.0 North is not an investment bank and does not manage an investment fund. While due diligence efforts are done in collaboration, each North Angels member makes their own investment decisions. North charges entrepreneurs fees for the completion of Venture 360 Reports to cover operating expenses. These fees allow us to operate without charging investors annual dues, or taking a percentage of capital raised. For some investments, North may assist in creating a unique LLC to aggregate investor capital. Through the management of this unique LLC, the North team may earn a percentage of profit called a “carry”. This “carry” is typically 20% of profit and is only paid after the LLC members have achieved returns greater than 100%. Bottom line, the LLC managers profit only after the members have doubled their investment. We couldn’t think of a more powerful way to make sure everyone’s goals are properly aligned.
  17. 17. On Your Marks. Get Set. Go North. This mission takes a team and we’re looking for more players to help shoulder the load. Angel members are by invitation only and membership is completely confidential. Solicitation of members is strictly forbidden. North requires no minimum annual investment, or membership dues. Members must be “accredited” under the SEC code, and comfortable enough with a computer to check email. Any additional time, effort, or capital invested is totally up to you. 16.0 Sign up now to start receiving the North deal flow. It takes about 2 minutes. Just click on the link below. Welcome to the world of innovation. Click Here to Join North Angels Read more about what we do at: Northern California Southern California www.dontgosouth.com 1729 Telegraph Ave Oakland, CA 94612 4316 Melrose Ave. Los Angeles, CA 90029

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