Angel InvestingPresented by Roger LondonAmerican Security Challenge
Background
$1B
Serial Entrepreneur #6?
Dept of Defense and Intelligence Community Tech Scout
Dingman Angels, Baltimore Angels
Startup America/NYSE, Wal-Mart, GE, Coca-Cola
NOKIA Venture Capital
Techstars mentor and partner
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Fundamentals?
Ignore Cus-tomers Poor Product Not Right Team No Market
Need
00.05
0.10.15
0.20.25
0.30.35
0.40.45
0.5
14%17%
23%
42%
Startup Failure Not Right Team
Poor Product
No Market Need
Ignore Customers
Top 4 Reasons Startups Fail
Red Flags
1. Market share based on % of total market2. FF&F terms not angel friendly3. Use of Proceeds pays salaries or debt4. Send unsolicited plans5. No competition6. NDAs7. Polishing the cannonball8. Bury the headline9. Relatives/friends on team10. Muddy IP
Soooo, what should you do?
1. Clearly defined benefits and differentiation in scalable business2. Get customers pilots/traction/involvement early*3. Show exit possible4. How are you going to make money!5. Traunche milestones6. Team examples of success7. Valuation 8. Clear, concise and compelling- 6th grader *9. Forget crowdfunding10. Profitable, repeatable, sustainable, scalable
Startups Hurdles Race Theorem
1. Distance: How long is the race…100 meters or mile? Is start to exit in 5 years or 15?
2. Number of Hurdles: is this a 3 hurdle race or 10 hurdle race where hurdles include factors like raising capital, finding talent, raising capital, creating demand in new market, manufacturing, raising capital, distribution, etc.
3. Hurdle height: are these hurdles easily crossed? Need 100 customers or 1M to break even?
4. Purse: playing for pile of pennies or pot of gold?
Bonus: from Driven Forward
1. Dumb money2. Kiss of death advisor3. Misspent effort4. King of the dung hill5. Build to buzz ratio6. Seem uncoachable
Bonus: from Driven Forward
• Mark Cuban ‘s 12 Rules for Startups: • Sales cures all
• Jeff Bezos: • ‘What’s not going to change in the next 10 years?
• Heidi Roizen:• the art of negotiation is finding the maximal intersection of mutual need
• Roger London• Investor decision making: Bus Theory
• Roger London:• Pattern recognition
Roger London, PresidentS3 Innovations
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