What are Investors Looking for when Evaluating your Business for a Potential Investment
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What are Investors Looking for when Evaluating your Business for a Potential Investment
- 1. The HVCFI / iCANny Entrepreneur’s Breakfast Forum July 11, 2012 What Investors Look for When Evaluating Your Business for a Potential Investment
- 2. Stonehenge aims to catalyze rapid growth of companies in up-and-coming markets by backing passionate entrepreneurs solving business problems. Stonehenge is focused on finding investment opportunities in underserved markets, areas where there is an abundance of entrepreneurship and innovation, but a relative shortage of locally available professionally managed capital.
- 4. Stonehenge is a Partner in the Communities we Serve
- 11. Entrepreneurship for America’s Future Chart from NVCA Venture Impact report, 2011 http://www.nvca.org/index.php?option=com_content&view=article&id=255&Itemid=103
- 12. What is Venture Capital? Chart from NVCA Venture Impact report, 2011 http://www.nvca.org/index.php?option=com_content&view=article&id=255&Itemid=103
- 13. What is Venture Capital? Chart from NVCA Venture Impact report, 2011 http://www.nvca.org/index.php?option=com_content&view=article&id=255&Itemid=103
- 14. What is Venture Capital? Chart from NVCA Venture Impact report, 2011 http://www.nvca.org/index.php?option=com_content&view=article&id=255&Itemid=103
- 15. So, START YOUR COMPANY!
- 16. Where to Get Help Early Hudson Valley Pleasantville Syracuse
- 17. But…How will I finance it? Making investments at the earliest stages of a company’s development involves extraordinary risk. Young companies have little or no collateral to secure bank loans, no assets or track records to attract financing from private equity firms and no opportunities for short term gain to interest hedge funds. Venture capitalists step in and assume this risk by providing capital.
- 18. First…A Detour
- 19. Is Venture Capital Right for My Business
- 20. How Your Investor Sees It
- 21. How Your Investor Sees It
- 22. Back on Track
- 23. Is Your Company Appropriate for Venture Capital?
- 24. What Kinds of Companies Attract Venture Capital?
- 25. What Kinds of Companies Attract Venture Capital?
- 26. How to Find the Right Match
- 27. There exists a HUGE Capital Gap when you need it most Typical starting point at which venture capital investment takes place Concept SEED/Start-Up Individual Angels Angel Groups Early Stage VC Mid/Later Stage VC CAPITAL GAP Friends/Family Achieving Liquidity Event "Capital Gap" 15 EARLY GROWTH LATER Negative Returns STAGE FUNDER ($ millions) Revenue 20 25 Start-Up 7 Years 5 10 1 2 3 4 5 6
- 28. VC Financing is Increasingly Hard to Find
- 29. Regionally Active Early Stage Funding Assistance
- 30. Where does Stonehenge Growth Equity fit in? Growth Stage: Post product, revenue, market introduction • Mitigates technology risk • Mitigates market adoption risk • Mitigates financial risk Mitigate risk, support rapid growth • Business model is proven and scalable • Capital invested is used to support accelerating growth • Significant upside with improved win/loss ratio Technology-Enabled Businesses • Applying technology to solve business problems • Typically recurring revenue models • No capital intensive R&D cycles • Usually software and/or services
- 31. Where does Stonehenge Growth Equity fit in? Stonehenge Focus • Intersection of Healthcare and IT • Post product development, early revenue, reference customers • $1 million investment (including match) What we won’t do • Drug Discovery • Medical Devices • Science Projects • Heavy hardware investment Innovate NY • $5 million allocation + matching funds • Seed-stage fund • New York based companies
- 32. Active Partnership Promotes Success Active Board Participation • Strategic Planning • Sales & Marketing • Corporate Governance Deep Network of Relationships • Recruiting • Service Providers • Other Investors Trusted Advisors to Entrepreneurs • Support early stage companies • Honest feedback, timely response • Willing to talk before you’re ready for investment
- 33. Keys to Attract Capital: Management Team
- 34. Keys to Attract Capital: Solve a BIG Problem
- 35. Keys to Attract Capital: Generate Revenue
- 36. Keys to Attract Capital: Be Passionate
- 37. Thank You Brian S. Model Managing Director, Stonehenge Growth Capital 152 West 57th Street, 20th Floor, New York, NY 10019 (212) 265-9380 bsmodel@stonehengegc.com