Angel Investments

prevalent

US

50k of 500k

start-ups

90%

outside equity

creating

new class

investors

11 to 50

ave # per project

Pre-seed

founders

family

friends

Start-up

Individual angels

Early/Later

Venture Funds

Funding gap

no

angels

VCs

VCs

100M

knoweledgeable

industry

not risky

pool of money

different investors

large margins

entpreneur

can deliver

stageable risks

don't invest for too long

clear exit

investing an amount worth their while

participation

decisions

Director

Advisor

Shareholder

Angels

30M

5 years

40%

annual returns

high GMs

large niche market

monopoly of market

unique products

ready for customers

Advantages

business

estalished

employees

know

existing

clients

Disadvantages

inherits

problems

liabilities

new owner

may not revive

losing business

may do worse

Elevator Pitch

summary

product opportunity

attract interest

closing

verbal

2 mins

Executive Summary

attract

interest

focus

business opportunity

balanced presentation

whole plan

serious investors

Full Business Plan

validation scorecard

due diligence

Preferred Stock

pay

interest

even if not profitable

Liquidation Preference

3 to 5 years

guarantee exit

plus 40% return

Board and Info rights

sits on the board

can't hide from

Anti-dilution

Participation Rights