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  • What does it take?
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  • Passion and Commitment Visionary Leadership Well-balanced Team Focus Respect for Team & Employees
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  • What does it take? FUNDING!!! $$$ FUNDING!! $$$ And More FUNDING!! $$$$
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  • Financing Life Cycle Idea Discovery Proof-of Concept Product Design Product Development Manufacturing/ Delivery Pre-seed Funding Seed Funding Expansion/Mezzanine Operating Cap. Friends and Family Seed Funds Founder Institutional Equity Loans / Bonds Start-up Funding Angels Angel Groups Venture Funds
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  • Investor Types TWO TYPES: Sophisticated & Unsophisticated FFF (friends, family and fools) Super angels Angel groups Venture capitalists
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  • Angels: Majority of Startup Funding $22.5B ~66,000 deals 42% seed/startup 55% early stage ~ 318,500 individuals Angel Investors 2011 $29B ~3,750 deals 3.5% seed/startup 68% later/expansion capital Total 791 firms (not all active ) Venture Capital 2011 Sources: UNH Center for Venture Research, PwC MoneyTree and NVCA $9.5B $12.4B $0.45B*$0.22B* $1.0B $8.4B $9.8B $9.9B *estimated
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  • The Number of Angel Groups is Growing Sources: Center for Venture Research, Kauffman Foundation and ARI
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  • An investment network of accredited investors formed in October 2003 Pittsburgh and Erie Members: cashed-out entrepreneurs, C-Level types, business executives, professionals 65 Members and growing Invested $22 Million in 35 companies Members make individual investments BlueTree Allied Angels
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  • 10 Deal Flow Process
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  • Submissions (~30 Plans Per Month ) Managing Director pre- screens emailed submissions. Screening Team Review (5 10 Plans Per Month) Screening team votes on which companies to invite to general meeting. General Meeting Presentations (1 3 Plans Per Month) Managing Director polls members for level of investment interest in deals, recruits diligence team, and facilitates selection of deal lead to begin term sheet negotiations. Manage Investment Board member represents member interests and seeks an attractive exit. Deal lead closes transaction and the sidecar fund invests in companies that attract at least $250K in investment from at least 5 members. Diligence & Term Sheet Negotiations Coordinated by: Managing Director & Deal Lead Typical Deal Process Source: James Geshwiler, CommonAngels, Boston (1 2 investments per quarter)
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  • 12 How will my start-up be evaluated by investors?
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  • 13 Management! Management! Management!!
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  • 14 WHY? Because its all about Execution!
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  • Management Team usually most important CEO o Coachable, vertical experience, leadership Team o Balanced & complete o Experience working together o OK to have some positions unfilled Investor Considerations Management team 35% Opportunity size and maturity25% Product or service20% Technology/solution uniqueness15% Investment structure10%
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  • Potential for company to grow and scale $30M min. revenue in 5 years High gross margins business Large niche market Unfair competitive advantage Ready for customers Fundable management team Business capable of providing a return to Investors through an acquisition (rarely IPO) Expect a 10X 30X ROI 1-2 of every 10 investments bring most of return >50% of businesses will fail Angel Investor Expectations
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  • 17 Elements of the Pitch
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  • Based upon Solid Business Plan/ Model Always have 2 page Executive Summary Deploy: 10 20 30 Rule Presentation - 10 Slides, 20 Minutes, 30 Point Font The Pitch
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  • Organization name, your name and title, and contact information. Explain what your organization does: We sell hardware for data networking companies." "We are a medical device company." Amount of money to be raised, and the purpose of the money. Cut to the chase! Do not try this http://www.youtube.com/embed/LMmdl4VltD4?rel=0 :01-:36 http://www.youtube.com/embed/LMmdl4VltD4?rel=0 Opening Slide
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  • Describe the pain/issues/problems you're alleviating The goal is to get everyone nodding and "buying in that the problem is real Avoid looking like a solution searching for a problem Problem
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