Angel Investing

10/10/2013

Copyright 2013 - John Ason1
Personal Background




25 years AT&T Bell Labs experience
Successful in stock market
Angel investor last 17 years

10/...
Angel Investments
Xlibris.com Scoople.it DoodleDeals.com
Koding.com EndlessTV.com ERAnyc.com
Centrak.com OffTrackPlanet.co...
What is Angel Investing ?





Source of funds for early stage companies
Typically first “professional” level
Typicall...
Angel Profile



Usually private
Ability to accumulate capital





Retired professionals
Entrepreneurs

Financial re...
What do Angels Want ?


A pleasant experience





An environment to contribute / participate





Excitement of gr...
Exit Strategies (descending order)






Chapter 11 / Disbanding
Life style (put option)
Buyout / Merger
Venture Capi...
How to Find Angels ?


Networking








Venture groups
Venture fairs
Internet
Accelerators
University lectures

I...
What do Angels Want to See ?





Short focussed business plan
Quality management / people
Reasonable valuation (20-30...
Negotiating with Angels



Must be win / win
Process is asymmetrical






Valuations fuzzy
Angel contribution fuzz...
Financial Returns




Ten times investment in 3 to 5 years
50% IRR per year
Lifestyle companies do not qualify

10/10/2...
Company Culture






Speed, speed, speed
Outsource everything
Leverage / margins
Compete / cooperate
Open non-secret...
Angels VS VCs
Money

Own

Other people’s

Revenues

None

$2 – 5 million

Management

Partial

Complete

Stage

Early

Exp...
Evaluation Process







Clear, concise, compelling, coherent
one page executive summary
Very large potential (10X)
...
Exploding Angel Market
Starting a company close to zero
 Validating a company close to zero
 Emergence of accelerators
...
International Activity







Foreign startups looking for funding
Foreign governments looking to build
angel and sta...
How to seduce an
early seed stage
angel

10/10/2013

Copyright 2013 - John Ason

17
Investors Want
Detailed market data
Complete management team
Detailed ROI analysis
Explicit problem statement
Industry exp...
WRONG!!!
(sorry!!)

This is for a later stage expansion company

10/10/2013

Copyright 2013 - John Ason19
Available Data

%
Angel

10/10/2013

Expansion VC

Copyright 2013 - John Ason20
Angels Want





Explicit statement of what you do
Rationale for market size
Bottom up market forecast
Quality managem...
Angels Want
To be sold EQUITY in

your company and NOT
a product or service

10/10/2013

Copyright 2013 - John Ason22
First encounter
Entertain
Impress
Inform
Only one chance to make first impression
10/10/2013

Copyright 2013 - John Ason23
How??
Less Words
Less Data
More Pictures
More Action
10/10/2013

Copyright 2013 - John Ason24
The sale is

Emotional

not data driven

10/10/2013

Copyright 2013 - John Ason25
Thank You
John Ason
www.JohnAson.com
Ason@comcast.net

10/10/2013

Copyright 2013 - John Ason

26
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IDCEE 2013: Angel investing - John Ason (Business Angel)

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John Ason has been an angel investor for over 17 years specializing in early stage pre-revenue companies. He has made over forty eclectic investments in the areas of e-commerce, technology, advertising, digital social media and entertainment. For about half of his investments, John has been the lead angel devoting a significant amount of his time to mentoring the companies. A typical company consists of one or two people in a garage or kitchen with minimal or no revenues. Any capital efficient industry with high growth potential qualifies with the exception of medical and biotech. As a starting point, John will accept only one page executive level summaries via email (ason@comcast.net).

Some of John’s companies are: Xlibris.com, Scoople.It, Bikini.com, Diapers.com, Soap.com, FulcrumGallery.com, Tips.by, AppyCouple.com, GetMaid.com, LiveLook.com, HotList.com, Hooja, CarbonNanoProbes, Centrak.com, TuckerToys.com, Geometrix, CallunaVineyards.com, Ology.com, Koding.com, WeHostels.com, DoodleDeals.com, MotionMathGames.com, MakeUsAnOffer, OffTrackPlanet.com and Spling.com.

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  • IDCEE 2013: Angel investing - John Ason (Business Angel)

    1. 1. Angel Investing 10/10/2013 Copyright 2013 - John Ason1
    2. 2. Personal Background    25 years AT&T Bell Labs experience Successful in stock market Angel investor last 17 years 10/10/2013 Copyright 2013 - John Ason2
    3. 3. Angel Investments Xlibris.com Scoople.it DoodleDeals.com Koding.com EndlessTV.com ERAnyc.com Centrak.com OffTrackPlanet.com Ology.com Diapers.com HotList.com Imbookin.com CallunaVineyards.com Tips.by Spling.com WeHostels.com LiveLook.com Bikini.com FulcrumGallery.com Geometrix SpatialLabs AdPilot Hooja MotionMathGames.com 10/10/2013 Copyright 2013 - John Ason3 AppyCouple.com PhlatBall.com Monaeo.com
    4. 4. What is Angel Investing ?     Source of funds for early stage companies Typically first “professional” level Typically $100,000 to $500,000 Experience / assistance provided 10/10/2013 Copyright 2013 - John Ason4
    5. 5. Angel Profile   Usually private Ability to accumulate capital    Retired professionals Entrepreneurs Financial return secondary concern 10/10/2013 Copyright 2013 - John Ason5
    6. 6. What do Angels Want ?  A pleasant experience    An environment to contribute / participate    Excitement of growing a company Financial return Management / oversight Contacts An exit strategy 10/10/2013 Copyright 2013 - John Ason6
    7. 7. Exit Strategies (descending order)      Chapter 11 / Disbanding Life style (put option) Buyout / Merger Venture Capital round IPO 10/10/2013 Copyright 2013 - John Ason7
    8. 8. How to Find Angels ?  Networking       Venture groups Venture fairs Internet Accelerators University lectures Intermediaries 10/10/2013 Copyright 2013 - John Ason8
    9. 9. What do Angels Want to See ?     Short focussed business plan Quality management / people Reasonable valuation (20-30% equity) Market validation 10/10/2013 Copyright 2013 - John Ason9
    10. 10. Negotiating with Angels   Must be win / win Process is asymmetrical      Valuations fuzzy Angel contribution fuzzy Angels timeframe is casual / slow Angels do not HAVE to invest Angels can walk away at anytime 10/10/2013 Copyright 2013 - John Ason10
    11. 11. Financial Returns    Ten times investment in 3 to 5 years 50% IRR per year Lifestyle companies do not qualify 10/10/2013 Copyright 2013 - John Ason11
    12. 12. Company Culture      Speed, speed, speed Outsource everything Leverage / margins Compete / cooperate Open non-secretive 10/10/2013 Copyright 2013 - John Ason12
    13. 13. Angels VS VCs Money Own Other people’s Revenues None $2 – 5 million Management Partial Complete Stage Early Expansion IRR 50% 30% Multiples 10X 2X – 4X Risk High Low 10/10/2013 Copyright 2013 - John Ason13
    14. 14. Evaluation Process      Clear, concise, compelling, coherent one page executive summary Very large potential (10X) Intellectually stimulating Marketing/sales skills Execution capabilities What’a missing??? 10/10/2013 Copyright 2013 - John Ason14
    15. 15. Exploding Angel Market Starting a company close to zero  Validating a company close to zero  Emergence of accelerators  Emergence of Super Angels (Micro VCs)  Emergence of AngelList Dramatic increase in speed of angel investing  10/10/2013 Copyright 2013 - John Ason15
    16. 16. International Activity      Foreign startups looking for funding Foreign governments looking to build angel and startup ecosystems VCs getting active Accelerators going international International conferences/hackatons 10/10/2013 Copyright 2013 - John Ason16
    17. 17. How to seduce an early seed stage angel 10/10/2013 Copyright 2013 - John Ason 17
    18. 18. Investors Want Detailed market data Complete management team Detailed ROI analysis Explicit problem statement Industry experience Prior successes Business plan 10/10/2013 Copyright 2013 - John Ason18
    19. 19. WRONG!!! (sorry!!) This is for a later stage expansion company 10/10/2013 Copyright 2013 - John Ason19
    20. 20. Available Data % Angel 10/10/2013 Expansion VC Copyright 2013 - John Ason20
    21. 21. Angels Want     Explicit statement of what you do Rationale for market size Bottom up market forecast Quality management team   Prior failures acceptable Prefer outside of industry 10/10/2013 Copyright 2013 - John Ason21
    22. 22. Angels Want To be sold EQUITY in your company and NOT a product or service 10/10/2013 Copyright 2013 - John Ason22
    23. 23. First encounter Entertain Impress Inform Only one chance to make first impression 10/10/2013 Copyright 2013 - John Ason23
    24. 24. How?? Less Words Less Data More Pictures More Action 10/10/2013 Copyright 2013 - John Ason24
    25. 25. The sale is Emotional not data driven 10/10/2013 Copyright 2013 - John Ason25
    26. 26. Thank You John Ason www.JohnAson.com Ason@comcast.net 10/10/2013 Copyright 2013 - John Ason 26

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