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

2. What is an Angel Investor? Who are we? And Where?
Agenda
What is an Angel Investor?
Who are we? And Where?
Where do we fit in the financing cycle?
Angel Deals – Typical
Closing Comments
September 2010

3. 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
September 2010

4. Angels - - - Who Are We? Years investing 7 Number of investments 7
Total exits/ closures
Years as entrepreneur
Number of ventures founded
Age
Percent of wealth in angel investing 10%
Education Masters degree
Source: Angel Capital Association
September 2010

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

6. Funding Gap between $500,000 and $2,000,000/$5,000,000
The Investment Gap
Research Funds, SBIR, Grants
Stage
Pre-Seed
Seed / Start-Up
Angel Organizations
Funding Gap between $500,000 and $2,000,000/$5,000,000
(depending on region)
Early
Later
Source
Founders, Friends and Family
(Fools)
Individual Angels
Venture Funds
Investment
$25,000 to $100,000
$100,000 to $500,000
$2,000,000/$5,000,000 and up
Source: Angel Capital Association
September 2010

7. 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!
September 2010

8. Closing - - Angels are active early stage investors/more
Groups are players now
Syndication of deals is common
Deals (funds in) have major economic impact
VC’s and Angels act more alike
Angels and early stage technology are symbiotic
September 2010

9. Chris Golden Boynton Angels 617-413-5787 cgolden@boyntonangels.com
September 2010

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

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

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. The Investment Process
Source Deals Members, ACA, Venture Forums, Other Groups, Contest, Networking
26 % Avg. IRR
Source: Boynton Angels/ACA