Do Angels Make Money?

If you like this presentation – show it...

Slide 0

Do Angels Make Money?

Slide 1

Do Angels Make Money?

Slide 2


Slide 3

Angel Data Shows 2.5x Returns Overall Source: Kauffman Foundation, NESTA (a UK-based entrepreneurship foundation), the University of Washington, and Willamette University Really, they do

Slide 4

Survey Says Angel investors’ internal rate of return (IRR) is between 18 and 38 percent…

Slide 5

Any ONE investment is likely to lose money. 6 investments increases the chances of a return greater than 1X. But, there is a catch

Slide 6

Will You?

Slide 7

Probably NOT

Slide 8


Slide 9

Your Active Bring Something to the Table Build a Portfolio Differentiate

Slide 10

Kaufman studies have shown that active investors are 3x more likely to realize a return than passive investors. Being Active

Slide 11

When you add value… What is active?

Slide 12

Domain expertise Hiring better talent Acquiring more customers Developing greater operational expertise Introductions to industry players or follow on investments Adding Value

Slide 13

Bring Something to the Table

Slide 14

Can you help this business scale faster & smarter? Why you?

Slide 15

How can you actually differentiate? Sell something else, of course. The Business Angel

Slide 16

Your expertise, Your portfolio’s network effect, Your history of success, or…. Sell your personal brand

Slide 17

Focus on a specific sector and stage of investment… Focus

Slide 18

Early stage startup versus a growth-stage business ready to scale. Challenges will be different. Market opportunities will be different. Expertise gaps will be different. Different Needs

Slide 19

Deliver relevant insights, ideas and advice. Identify opportunities within the niche. Create a team capable of delivering on those opportunities. Deliver

Slide 20

To develop a portfolio strategy Rinse & Repeat

Slide 21

Build a Portfolio

Slide 22

Do You Have the Money? Portfolio of 10 Deals Initial investment - 10 x 50,000 = 500,000 Dry powder – 10 x 25,000 = 250,000 Investment Pool 750,000

Slide 23

Do You Have the Deal Flow? Angel Clubs Online – AngelsList, Gust, Angels Den Personal Network

Slide 24

Do You Have Selection Intelligence? Do Your Homework - Each investment has to be done as though it’s your only one.

Slide 25

Term Sheet Basics Valuation considerations Securing the opportunity to invest further in their winners Protecting yourself from being diluted if a company begins to falter The connection between the term sheet and an investor's control over a company

Slide 26

Do You Have a Team? Legal – Don’t know what a drag along right is? Get Help Financial – Tax Credits, Capital Gains Others – Governance, Technical or Operations

Slide 27

Can You Make Introductions? Mentors, Vendors, Personnel Other Investors – Can you help raise the next round? Introductions to their first customer or strategic partner Help find an exit

Slide 28

Your founders will Build better companies, Have more successful exits. If Yes, then…

Slide 29