1. Angel Investing Trends and Highlights

2. A Few Facts $20B invested in the U.S. annually 60,000 companies – 80% seed 258,000 active angel investors Average investment size - $10K - $100K Not neat and tidy Hard work but fun

3. Why Invest Early – High Return Potential $1000 in FB in 2005 = $624,500 today (62,450%) $1000 in Airbnb in 2009 = $589,667 today (58,967%) $1000 in Dropbox in 2008 = $391,500 today (39,150%) Peter Thiel invested $500K in FB for 10.2% in 2004. He sold 16.8M shares at IPO for $638M and has another $396M left.

4. But Remember Many die Some survive (1 – 5x) A few thrive (20x+)

5. Startup Investor Ecosystem Angels & Incubators ($0-10M) “Micro-VC” Funds ($10-100M) “Big” VC Funds ($100-500M) “Mega” VC Funds (>$500M) Starfish Southern Cross General Catalyst Pollenizer Startmate PushStart Tank Stream Carnegie Blackbird Sequoia Accel GBS Netus Innovation Bay Bootstrap, KickStarter, Crowdfunding

6. Highlights Q1 2013 – Halo Report Median Angel Round Size Up To $700K Pre-Money Valuations Average $2.5M 81% of deals occur in angel groups home state Angel Groups Syndicate 3 Out of Every 4 Deals

7. Median And Mean Round Size

8. Co-Investing Median Round Size

9. Q2’13 Sectors Internet – 37.2% Healthcare – 19.9% Mobile – 13.6% Software – 4.2%

10. Sectors

11. Round Size By Sector

12. U.S. Valuations First Quartile - $1.2M Median - $2.5M Third Quartile - $3.0M Top Quartile - $5.5

13. Valuations – Halo Report

14. Co-Invest Percentages

15. Strategies to Enhance Performance Pick a Goal – Is this for fun, profit or philanthropy? Invest Where You Have Industry Expertise – Analysis indicated that expertise has a material impact on angel investors’ returns. Returns were nearly double for investments in ventures where the investor had related industry expertise and contacts. Increase Due Diligence Time – Investors experienced better returns in the deals where they exercised more due diligence. Sixty-five percent of the exits with below-average time spent on due diligence reported a return that was less than their original investment. Losses occurred in only 45 percent of the deals where investors did above-average due diligence. Syndicate or Co-Invest With Experts (pattern recognition) Build a Portfolio (10 or more) – Look at a lot of deals before you invest Participation or Adding Value – After an angel makes an investment, his or her participation in the venture – through mentoring, coaching, and financial monitoring – is significantly related to that venture’s returns, according to the study. Be Careful With Follow-On Investing – Deals where the angel investor made follow-on investments generated significantly lower returns. In ventures where follow-on investments were made, nearly 70 percent of the exits occurred at a loss. http://www.kauffman.org/research-and-policy/returns-of-angels-investors-in groups.aspx#sthash.TObynS6L.dpuf http://www.kauffman.org/research-and-policy/returns-of-angels-investors-in

16. Important Considerations Team, expertise, and market are most important Chemistry must be good Deep understanding of the problem (authentic connection) + passion is key Deal structure and valuations are important but secondary

17. Places To Learn More http://www.paulgraham.com/angelinvesting.html (Paul Graham) http://www.paulgraham.com/angelinvesting.html https://angel.co (Angel List) https://angel.co http://www.angelresourceinstitute.org (Angel Association US) http://www.angelresourceinstitute.org http://www.fabricegrinda.com/entrepreneurship/9-business-selection- criteria/ http://www.fabricegrinda.com/entrepreneurship/9-business-selection- criteria/ http://www.svb.com/halo-report/ (Halo Report) http://www.svb.com/halo-report/ http://aaai.net.au (Australian Association of Angel Investors) http://aaai.net.au http://www.tommckaskill.com/ebooks/angels.html (Tom McKaskill’s book An Introduction to Angel Investing) Innovation Bay, Sydney Angels, Melbourne Angels, SA Angels, etc