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Angel Investors Presented by: Chris Golden Chairman, Boynton Angels.

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Presentation on theme: "Angel Investors Presented by: Chris Golden Chairman, Boynton Angels."— Presentation transcript:

1 Angel Investors Presented by: Chris Golden Chairman, Boynton Angels

2 September Agenda What is an Angel Investor? Who are we? And Where? Where do we fit in the financing cycle? Angel Deals – Typical Closing Comments

3 September Angels - What is an Angel? High Net Worth Individuals (Qualified Investors) Usually Male (15% -20% Female)* Retired and/or Cashed Out High Tolerance for Risk Experienced Entrepreneurs/Executives Interested in Giving Back Expect Reasonable Return Increasingly Moving Into Groups Private!!!! * Angel Capital Association

4 September Years investing 7 Number of investments 7 Total exits/ closures 1 Years as entrepreneur13 Number of ventures founded 2 Age57 Percent of wealth in angel investing10% EducationMasters degree Angels Who Are We? Source: Angel Capital Association

5 Where the Angels*Are! * ACA Groups 259,480 Angels (USA) $17.6B Invested in 57,225 deals 259,480 Angels (USA) $17.6B Invested in 57,225 deals 2009 DATA

6 September Stage Angel Organizations Funding Gap between $500,000 and $2,000,000/$5,000,000 (depending on region) Source Founders, Friends and Family (Fools) Venture Funds $2,000,000/$5,000,000 and up Pre-Seed Seed / Start-Up EarlyLater Investment Individual Angels $25,000 to $100,000 $100,000 to $500,000 Source: Angel Capital Association The Investment Gap Research Funds, SBIR, Grants

7 September Investment Criteria Typical Targeting Life Sciences (Not Pharmaceuticals), energy, communications, and software Location within a 2 hour driving radius Seeking no more than $2M with minimal follow on funding 5-7 Years to liquidity w/potential to generate a strong ROI Clear Market Need and Value Proposition Exceptional Management with Domain Experience Strong Intellectual Property Position A COMPELLING STORY!

8 September Closing - - Angels are active early stage investors/more Groups are players now Syndication of deals is common Deals (funds in) have major economic impact VCs and Angels act more alike Angels and early stage technology are symbiotic

9 September Chris Golden Boynton Angels

10 10 Reaching Out To Angels Angels tend to be hidden/private Groups offer best access ACA offers widest access Angelsoft – On Line Access Profiling Angels and Groups VC – early stage – together more than ever Communications – Reaching out

11 11 Group Structures LLC Umbrella – Individual Investors Fund – Professionally managed pool of funds. Hybrid – Group may have individual investments and a side car fund.

12 12 Angel Investment Deal Trends Angels equity deals look increasingly like VC deals Too many bad consequences of not adding all types of protection Angels groups are focused on a range of deal sizes now enabled by syndication deals (many single rounds over $1m) Angel equity deals trends More participating preferred deals recently Anti-dilution (weighted average) for deals thought to be over priced Cumulative Dividends Board membership designed to persist Angel equity deals are increasing as a percent of deals Most deals have one or more follow on rounds

13 13 Angel Investment - PLUS Money Management Experience Expertise - Domaine Contacts Maturity Mentor

14 14 Angel Investment Deal Trends Angels continue to use Convertible Notes as an investment instrument These notes collect interest (8-10%), convert into preferred stock in a future round If the company never closes a qualified deal this is debt Usually discounted on the price of a future equity round as a risk adjustment (10-30% discount to next round pricing) on average.... or Issue common warrants Trends include default pricing on notes and a noteholder agreement to provide board rights

15 15 The Investment Process Screening [89] Presentation [23] Leader Due Diligence Terms [8] Investment Maybe!!! [ 3 ] Monitor Report Board Seat Deal Input [123] Source Deals Members, ACA, Venture Forums, Other Groups, Contest, Networking Source: Boynton Angels/ACA 26 % Avg. IRR

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