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John Ason
Angel Investing
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Angel Investing
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Personal Background
25 years AT&T Bell Labs experience
Successful in stock market
Angel investor last 17 years
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Angel Investments
Xlibris.com Scoople.it DoodleDeals.com
Koding.com GetMaid.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
AppyCouple.com PhlatBall.com IvyExec.com
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What is Angel Investing ?
Source of funds for early stage companies
Typically first “professional” level
Typically $100,000 to $500,000
Experience / assistance provided
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Angel Profile
Usually private
Ability to accumulate capital
Retired professionals
Entrepreneurs
Financial return secondary concern
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What do Angels Want ?
A pleasant experience
Excitement of growing a company
Financial return
An environment to contribute / participate
Management / oversight
Contacts
An exit strategy
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Exit Strategies (descending order)
Chapter 11 / Disbanding
Life style (put option)
Buyout / Merger
Venture Capital round
IPO
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How to Find Angels ?
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How to Find Angels ?
Networking
Venture groups
Venture fairs
Internet
University lectures
Intermediaries
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What do Angels Want to See ?
Short focussed business plan
Quality management / people
Reasonable valuation (20-30% equity)
Market validation
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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
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Financial Returns
Ten times investment in 3 to 5 years
50% IRR per year
Lifestyle companies do not qualify
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Company Culture
Speed, speed, speed
Outsource everything
Leverage / margins
Compete / cooperate
Open non-secretive
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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
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Evaluation Process
Clear, concise, compelling, coherent one page executive summary
Very large potential (10X)
Intellectually stimulating
Marketing/sales skills
Fundamental keystone patent
Execution capabilities
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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
Emergence of graphical investor decks
Emergence of family offices
Dramatic increase in speed of angel investing
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International Activity
Startups are outsourcing
Foreign startups looking for funding
Foreign governments looking to build angel and startup ecosystems
Accelerators going international