This document provides advice for entrepreneurs seeking angel investment. It outlines important statistics about small businesses and angel investors in Canada. The author notes that in 2013 there were around 2100 identified angel investors who completed only 134 deals. The document then gives tips for entrepreneurs seeking angel funding, such as understanding your market and customers, having a compelling story, explaining the problem your business solves and how you will make money. It emphasizes the importance of customer validation, intellectual property, historical financials, and clearly explaining the funding request. The overall message is that entrepreneurs should be well-prepared and able to justify their business plans when seeking angel funding.

1. Don Magie
Angel Investor

2.  Welcome to the world
of entrepreneurs
Some financing stats
 In December 2012,
Canada had 610,178
businesses employing
1-4 people
 In a typical year
 80,000 are born
 60,000 business die
 7,000 are bankrupt
2(c) 2015, Magie Consulting

3.  Community Good
 Diversification
 High Growth
 Mostly . . . Angels want to make money
3(c) 2015, Magie Consulting

4.  In 2013 there were about 2100 identified angels,
the number is likely higher.
 Only 134 angel deals were completed in 2013
 Key Ontario Angel Groups
 Northern Ontario Angels
 Angel One Investor Network
 Golden Triangle Angel Network
 Capital Angel Network
 Spark Angels
 York Angels
 Maple Leaf Angels
 Niagara Angel Network
 Find all Angel Groups on www.nao-ontario.ca
4(c) 2015, Magie Consulting

5.  Local deal flow falls into these categories
 Info & Computer Tech (ICT) (45%)
 Life Sciences (33%)
 Clean Tech (12%)
 Other (10%)
 Angels will consider deals in other areas, and
commonly look for significant intellectual
property and/or high growth
5(c) 2015, Magie Consulting

6.  Funding requests fall flat all the time
 Some ideas don’t work
 Find out WHY!!
 Is it market?
 Is it product?
 Is it stage?
 Is it you?
 If you can’t get attention, get customers!
6(c) 2015, Magie Consulting

7.  Angels need key information, but . . .
 Don’t be boring
 Tell a story about your customer or your
business or your product that is compelling
7(c) 2015, Magie Consulting

8.  What problem do you solve?
 Why will someone pay you to solve the
problem?
 How big is the problem?
 When/how will you make money?
 Who is on your team?
 What do you need from the angels?
8(c) 2015, Magie Consulting

9.  Do you understand your market
 Experience matters
 Depth matters
 Prior success matters
 You probably can’t do it all but be great at
what you do.
9(c) 2015, Magie Consulting

10.  Three categories of product
 Products with IP
 Products with Brand
 Everything else
 Intellectual Property when granted provides
comfort to investors.
 IP with customers has more value.
 ‘Applied’ for has limited value.
 Brand identity dramatically reduces risk
 Customer validation is important
10(c) 2015, Magie Consulting

11.  Just a product is not enough
 How will you
 Sell?
 Support?
 Defend?
 What is your cost of customer acquisition?
 Does your product/service have key
dependencies
 How long will a customer stay?
 Can you find employees?
11(c) 2015, Magie Consulting

12.  Do you understand how to grow?
 Production
 Distribution
 Human Resources
 Support
12(c) 2015, Magie Consulting

13.  Highlight historical ACTUAL sales and
expenses
 Project revenue/expenses you can justify
 Explain how customers pay you
 Explain how investors profit
 Project time and funding required to CFP
13(c) 2015, Magie Consulting

14.  What Instrument?
 Equity
 Preferred Shares
 Convertible Debt
 How much are you raising?
 Pre-money valuation?
 Other investment/investors
14(c) 2015, Magie Consulting

15.  Don’t make it complicated
 Separate product/technology from business
 Customer validation reduces risk
 Leave complex items for due diligence but …
 Be direct with answers
15(c) 2015, Magie Consulting

16.  Most angels have significant experience
 Straight talk will win friends
 If it sounds too good to be true . . .
Thank You and
Good Luck
16(c) 2015, Magie Consulting