1. Strategies for Dealing with Angels For MassMEDIC Richard Lucash October 18, 2005

2. 2 Who Are the Angels? Friends  Professional Groups “Angel” => Amateur (easy mark) Very friendly (ditto) Unprofessional (avoid) Don’t bet on it!

3. 3 Increasing Professionalism VC’s may personally invest Then it’s their own money on the line, and bear risk of loss Individuals – may have industry expertise (But that’s not investment expertise)

4. 4 Professionalism, continued Groups Pool money Pool expertise Full or part time management Common, Hub, LaunchPad, many others

5. 5 Angel Deals Convertible Note Note with Warrants Series A May have Board or observer status Participation in future rounds

6. 6 What to Look for in an Angel Expertise that can help you Reputation that can help you Connections that can help you Someone you can spend time with And who wants to spend time with you

7. 7 Approaching the Angels Get An Introduction Group member Seek a “champion” Affiliate: Attorney, accountant, etc. Determine the angel/group’s area(s) of interest and expertise Have an excellent executive summary

8. 8 What Angels Look For TEAM Founder or committed CEO to do presentation Past record of achievement in relevant industry Advisors: Names don’t count unless actively involved

9. 9 What Angels Look For (2) Product/Service should be “need to have” Line up industry contacts to support Real market with attractive revenue stream Clear, realistic, focused B-Plan Barriers to Entry – IP and/or other

10. 10 What Angels Look For (3) Revenue – at least one customer has PAID for the product/service Product is ready Product is under development and demo ready

11. 11 Turn-offs “Me too” Low Barriers to Entry “Missionary” Large follow - on capital needs “Keep the lights on” capital raise Multiple target markets addressed at early stage of company

12. 12 Presenting to Angels Executive Summary – 2-4 pages PowerPoint for the Presentation: Simple Legible Short 20 slides, 20 minutes under pressure

13. 13 Presenting to Angels (2) Try out the presentation and Executive Summary: Advisors MIT Enterprise Forum; other If you don’t succeed, seek feedback Assume 3 months minimum from contact to close