presentation: accessing angel and venture capital

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ACCESSING ANGEL & VENTURE CAPITAL A PRESENTATION TO FROM February 19, 2009 Presented By: Jim Noble Regional Coordinator Northern Ontario Enterprise Gateway (705) 377-7600 1-866-924-7600 [email protected] www.noeg.ca

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Page 1: Presentation: Accessing Angel and Venture Capital

ACCESSING ANGEL & VENTURE CAPITAL

A PRESENTATION TO

FROM

February 19, 2009Presented By:Jim NobleRegional CoordinatorNorthern Ontario Enterprise Gateway(705) [email protected]

Page 2: Presentation: Accessing Angel and Venture Capital

02/19/08 Accessing Angel & Venture Capital 2

NOEG – An Overview

Incorporated non-profit with a volunteer board.

Funding from FedNor.

Mission to stimulate the flow of capital (equity)investment and management expertise from northern investors into high-growth potential Northern Ontario companies.

Page 3: Presentation: Accessing Angel and Venture Capital

02/19/08 Accessing Angel & Venture Capital 3

NOEG – Accomplishing theMission.

Formation of local/regional angel investor networks.

Building links to other angel groups to increase investment capacity.

Help entrepreneurs prepare for investment – through our investor-ready programs.

Provide a process and link through which investor-ready entrepreneurs can access accredited investors.

Page 4: Presentation: Accessing Angel and Venture Capital

02/19/08 Accessing Angel & Venture Capital 4

Angel/VC Investment Landscape

Angels48,000 Deals

$22-$24B

2004 Investment

In North America

VCs2,876 Deals

$21B

Page 5: Presentation: Accessing Angel and Venture Capital

02/19/08 Accessing Angel & Venture Capital 5

The Traditional Funding Landscape – Where Angels &VC’s fit

HIGH

Level of Investment RiskAssumed byInvestor

Seed Start-Up Early Growth Established

Stage of

Business LOW

Founder/Friends/Family

Government.

Angels

VC’s

M&A/EquityMarkets

Commercial Banks

Page 6: Presentation: Accessing Angel and Venture Capital

02/19/08 Accessing Angel & Venture Capital 6

The Funding Landscape“After the Meltdown”

HIGH

Level of Investment RiskAssumed byInvestor

Seed Start-Up Early Growth Established

Stage of

Business LOW

Founder/Friends/Family

Government.

AngelsVC’s

(VC Ghost Town)

M&A/EquityMarkets Closed

Commercial BanksMore Risk Adverse

The Funding Gap for Start-Up’s andEarly-Growth Companies is widening

Page 7: Presentation: Accessing Angel and Venture Capital

02/19/08 Accessing Angel & Venture Capital 7

Impact on Entrepreneurs

o Cash is king (cash-flow)

o Must learn to bootstrap (do more with less)

o Valuations will be less

o Must be sure investors have deep enough pockets to get across the “funding gap”

o Harder to get funded

Page 8: Presentation: Accessing Angel and Venture Capital

02/19/08 Accessing Angel & Venture Capital 8

Impact on Investors

Potential reduced investment capacity

Increased risk of dilution

Getting “stuck” with no exit

BUT – ANGELS ARE STILL INVESTING

Page 9: Presentation: Accessing Angel and Venture Capital

02/19/08 Accessing Angel & Venture Capital 9

Angels & VC’sCompared & Contrasted

Angels V/C’s

Investment Invest their own money + mentoring

Invest other people’s money (institutions)

Funded Amounts $100,000 to $1.5 million (syndicating trend today in order to make larger investments)

+1.5 million +++

Page 10: Presentation: Accessing Angel and Venture Capital

02/19/08 Accessing Angel & Venture Capital 10

Angels & VC’sCompared & Contrasted

Angels V/C’s

Key reasons to invest

Chemistry with management, detailed go-to-market strategy, rapid growth potential

Operating history, experienced management team, can scale, sustainable competitive advantage

Number of Investments each year

Less than VC’s – have luxury of being selective

More than angels, need to make a minimum number of investments in a given year

Page 11: Presentation: Accessing Angel and Venture Capital

02/19/08 Accessing Angel & Venture Capital 11

Angels & VC’sCompared & Contrasted

Angels V/C’s

Terms Somewhat negotiable

Less negotiable

Post-money Valuations

Less than $3 Million

$5 million and above

Page 12: Presentation: Accessing Angel and Venture Capital

02/19/08 Accessing Angel & Venture Capital 12

Contact Me:

Thank You and Questions

Jim Noble, NOEG Regional Coordinator bytelephone at 1-705-377-7600, toll free 1-866-924-7600 or through our website at www.noeg.ca.

Thank you.