This document discusses the importance of angel investing for small businesses. It provides an overview of angel investing including: - Angel investing provides capital for startups through various funding rounds from friends and family investments to larger venture capital rounds. - Angels invest money, provide customers, connections, mentoring and help startups find talent, additional funding, and potential exits. - While investing is challenging and risky, it can provide returns through supporting innovative small businesses and adding jobs to the local economy. Angel groups help new investors participate and learn.

1. Why Angel Investing is
Important To Small
Business

2. About Me
• Co-Founder of Hyde Park Angels (www.hydeparkangels.com) and West
LoopVentures (www.westloopventures.com)
• Blog at pointsandfigures.com Tweet @pointsnfigures
• Active investments in: KapowEvents.com, YCharts.com, Brilliant.org,
Alltuition.com, Desktimeapp.com, UICO.com, Supply-vision.com,
Tallgrassbeef.com
• Past Investments: Win Detergent, Noblivity, Shuffletech, FeeFighters,
Gradebeam
• Trustee at the National World War Two Museum
(http://www.nationalww2museum.org) in New Orleans, Louisiana
• married, two kids in college; traded for 22 years at the CME where I was on
the Board of Directors
• BS Univ of Illinois, College of Business; MBA University of Chicago, Booth
Graduate School of Business

3. WhatYou Do
• Small Business provides support for
Scalable companies
• Adds Character to a City
• Adds depth by providing income to
employees that become customers of
startups
• Become customers of startups

4. What StartUps Do
• Create businesses that make your business
better and more efficient
• Create customers for your business
• Become customers of your business
• Add jobs to the area, increasing your
business potential

5. 4 Ways To Participate In
Chicago Renaissance
• Talk about startups to your friends
• Make an introduction for them to a
potential customer
• Become a customer
• Invest in them

6. Lifecycle of an
Investment
• Investing is HARD WORK !!!!!
• Friends and Family
• Seed or Angel Round
• Series A and B round
• Venture Capital Round(s)
• Exit

7. Mistakes
• Take money-and that’s all they get
• Overvalue their companies
• Take too much money
• Take too little money

8. Friends and Family
• Small round of money, less than $100k.
Structured as Convert Debt. Gets
company going

9. Angel Round
• Convert Debt, or a priced round. Usually
less than $1M. Gives company 12-18
months of runway

10. Typical Angel Deals
• AverageValuation is $1-3M pre-money.
• Most seed rounds are between $300k and $1M
depending on the business
• Seed round should be 12-18 mo runway (company
is pre revenue, pre product)
• Angels looking for return. Average return for all
angel deals is around 27% IRR (Includes the ones
that went bust)
• Typical deal is 5-7 years in length.

11. What An Angel Does
• Invest Money
• Create Customers, Connections
• Mentor and Advise
• Help Find Talent for Firm
• Create Next Rounds of Financing
• Create Possible Exits
• Angels typically don’t run companies

12. Series A and B
• Bigger rounds, priced, more runway and
allows company to scale up and grow fast
• Usually post pivot-scaling in a market
segment and dominating

13. VC Rounds
• Big rounds of capital done at valuations of
$10M +
• More scaling, and diversifying business to
attack more segments
• Playing for big exit (Home Run)

14. Exit
• NOT an IPO
• Usually acquisition by another company or
a family office, or a PE firm

15. Why Investing Is Hard
• Finding, due diligence, structure, mentoring,
post investment management, raising next
rounds of capital, planning for exits
• Learning curve of investing

16. Alternatives
• Join an Angel Group
• Invest in a Fund (inefficient and scale tips to
the fund managers not you, asymmetric
deal choice )
• West LoopVentures (economic incentives
are aligned with GP and LP)

17. Q+A
• Ask me anything you would like