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Chris Golden Chairman, Boynton Angels

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Presentation on theme: "Chris Golden Chairman, Boynton Angels"— Presentation transcript:

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
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

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