Presentation on theme: "Wining Investors with your Pitch and Presentation"— Presentation transcript:
1 Wining Investors with your Pitch and Presentation Boston Entrepreneurs’ NetworkApril 1, 2014David VerrillFounder/Managing Director – Hub Angel Investment Group, LLCChairman – Angel Capital Association
2 Background David Verrill Bowdoin (BA), MIT Sloan (SM) Experience includes fundraising (MIT and Winchester), sales and business development (Xerox – Adaptive Products)CurrentFounder and Managing Director – Hub Angel Investment Group, LLCPartial Appointment – MIT Sloan School Center for Digital BusinessBoard of Directors/Observer – Ecochlor, Harmony Line, Seahorse Bioscience, Intelligent Bio-Systems, iTeam, Angel Capital AssociationHub Angel Investment Group HistoryStarted in 2000 as an experiment using a “club” model“Institutionalized” as a fund in 2001Launching Hub Fund V in AprilModel – Fund w/ reserve 50% in “dry powder”, Members have co-investment rightsTwo partners – fundraising/sales/bizdev, strategy/healthcare/compensation>75 Members – entrepreneurs, VCs, financial services, healthcare, family offices…Disclaimer - I speak as an organized angel group investor, not an individual angel investor, not a venture capitalist
3 Sample Portfolio Hub Club Fund I Fund II Fund III Fund IV Flexplay – Disposable DVDZipcar – Local/By-the-hour Car RentalFund ISeahorseBio – Dynamic Measurement of Cell MetabolismExperion – Online Trusted Advisor S/WLifeHarbor – Managed Account S/WCircleLending – Online P2P Loan AdministrationFund IIEcochlor – Ballast Water TreatmentCatalyst Oncology – Reference Lab for Shc Test (Cancer)iTeam – IT Services as a SKUFund IIIIntelligent Bio-Systems – DNA SequencingGeezeo – Personal Financial Management for Banks/Credit UnionsDaktari Diagnostics – 3rd Ring Real-time DiagnosticsIncentive Targeting – Ad Targeting in the Grocery IndustryCopiun – PC/Tablet Data ManagementFund IVLocalytics – Mobile App AnalyticsDraftKings – Daily Fantasy SportsMobee – Crowdsourced Market IntelligencePageScience – Cookieless Ad Targeting
4 Hub Process Generate deal flow Screen Prepare/Present Due diligence RecommendNegotiateHelp grow and exit
5 Executive Summary (3 pages or less) Company Name, Type (S, C, LLC) and Date FoundedLocation (primary location of business)Referred by (who referred you to the Hub Angels)By-line (promotional statement – 7 words maximum)Focus (briefly, what is the problem facing the target market)Product (briefly, what is your product, how does it solve the market’s problem, and what stage of development/implementation is it currently)Addressable Market (what is the specific size of the addressable target market in $, and what are the major segments)Revenue Model (describe in words the revenue model, and distribution channels)Projections (list revenue - actual and projected - for each revenue model/product, expected break-even point, and projected total headcount by year)Revenues ($000,000)MarginBreak-even pointHead countCompetition (with specific company names, describe both the direct and indirect competition, and your advantage over each)Management Team (state total # of full-time employees and list the senior management team and briefly describe the work history and education of each)Burn Rate (what is the present net monthly burn rate)Board/Advisors (list the members of the board and advisors with a brief description of each)Intellectual Property (describe any patent, trademark or copyright ownership and its strength and relevance)Present Ownership/Investors/Valuation (list ownership and valuations for previous investors with dates of previous investments if any)Pre-Money Valuation (present valuation of the company)Type of Security Offered (specific type of equity or debt security, e.g. Series A Preferred, Bridge Loan, etc.)Subscription Amount, Total Estimated Capital Requirement (minimum and maximum capital desired in this round, and an estimate of total capital required to take the company to an exit)Exit Rationale and Comparables (list likely exit scenarios and relevant comparable examples of other company exits in the space – with exit multiples if possible)
6 Presentation (15 slides or less) Slide 1 – Company Name, ContactSlide 2 – Overview of Key Take-away PointsSlide 3 – Market Pain and Goal of CompanySlide 4 – Size of Target (Addressable) MarketSlide 5 – First Product w/ Hint at Product ExtensionsSlide 6 – How Product WorksSlide 7 – Revenue ModelSlide 8 – Pro Formas w/ BE, Headcount, Margins, Etc.Slide 9 – CompetitionSlide 10 – IP/Barriers to EntrySlide 11 – Team Including Board/AdvisorsSlide 12 – Capital Requirements and Current Deal TermsSlide 13 – Exit Strategy w/ ComparablesSlide 14 – SummarySlide 15 – Company Name, Contact
7 Pet Peeves Competition Financials Exit Rationale and Comparables “We have no direct competitors”2x2 matrix with too few companies – only one in the “upper right”Comparison in a grid with chosen few attributesFinancialsDo they pass the “sniff test”?What are the “unit economics”?Are the underlying assumptions sound?Is model thorough, and inclusive of hiring and associated costs?Exit Rationale and ComparablesHas the CEO even thought about it?What are the pain points in the industry?Who is buying – when and why?Are exits cash/equity?What are typical multiples on revenue/EBITDA?Give me some researched examples that include capital raisedDoes capital strategy match exit strategy?
9 Examples of investors in Boston Angel Groups (Individual wealth to $10 million funds)Hub AngelsCommon AngelsLaunchpadMass Medical AngelsGolden SeedsSmaller VCs ($ million funds)406 VenturesNew AtlanticKephaNorwichLongworthBigger VCs ($250+ million funds)PolarisVenrockGeneral CatalystNorthBridgeGlobespan
10 What differentiates Hub? Invest in the $2.5mm to $10mm pre-money valuation rangeInvest in a broad range of industry sectorsWon’t look at unsolicited dealsOnly invest in the “Boston area”Use a fund as the primary investment vehicle, and leverage with co-investment rights of MembersGet in the boat and row - bringing the networks of our membership to bear, and taking a Board seat (or Observer rights)Affinity with the top schools
11 What do Angels Look for?Stuff they know, people they like, close to where they liveCollateral…keep it simpleExecutive Summary (1-3 pages)PowerPoint (15 slides)Pitch…focus on realityAddressable Market SizePain PointsUnique Ability to Address PainBarriers to EntryAt Least One Star on Management TeamImpressive Board/AdvisorsExamples of Comparable ExitsFinding Money…financing is your (first) biggest riskUse Your Network to get to Friends, Family, Angels, Angel GroupsSegment the Angel MarketDo a Lot with a LittleSet and Reach Achievable Goals (monthly, quarterly)
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