Angel Investing as an Asset Class
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A N G E L I N V E S T I N G A S A N A S S E T C L A S S
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www.mapleleafangels.com | [email protected] | 416.646.6235 | @mapleleafangels
AGENDA
WHO ARE TYPICAL ANGELS
WHO ARE MAPLE LEAF ANGELS
ANGEL INVESTING IN CANADA
ANGEL INVESTMENT
QUESTIONS & ANSWERS
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www.mapleleafangels.com | [email protected] | 416.646.6235 | @mapleleafangels
MLA CONNECTS
Our mandate is to connect experienced accredited investors, and the brightest, most passionate entrepreneurs in an effective investment process.
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www.mapleleafangels.com | [email protected] | 416.646.6235 | @mapleleafangels
ANGEL NETWORKS IN CANADA
• National Angel Capital Organization ( NACO) - Canada’s industry association representing Angel capital in Canada• 28 Angel Groups in Canada• They have collectively about 1500 investors• The majority have fewer than 50 members• 50% of groups set up since 2008
• Network of Angel Organizations Ontario (NAOO) – Umbrella organization for Ontario based groups• Currently Southern Ontario Angel Investment community has 13
groups
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www.mapleleafangels.com | [email protected] | 416.646.6235 | @mapleleafangels
BOARD OF DIRECTORS
Board Chair
Board Vice Chair
Chair- Membership and Events Committee
Chair-Technology Committee
Board Member
Chair – Investment
Review Committee
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• Wealthy individuals – “accredited investors”• “Been there, done that” entrepreneur• Active investors – invest to engage• Range of involvement - Lead investor: Chair of the board - Investor/advisor - Passive investor
www.mapleleafangels.com | [email protected] | 416.646.6235 | @mapleleafangels
WHO ARE THESE ANGEL INVESTORS?
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• Return on Investment is the Metric (23%-27%)
• Staying involved (sense of usefulness)
• Give back to community
• Affection for entrepreneurs
Source: Angel Investing – an Overview. Angel Resource Institute
www.mapleleafangels.com | [email protected] | 416.646.6235 | @mapleleafangels
MOTIVATION OF ANGEL INVESTORS
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VALLEY Source: Entrepreneurial Energy
www.mapleleafangels.com | [email protected] | 416.646.6235 | @mapleleafangels
ANGEL INVESTMENTS – HOW YOU HELP
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• Companies are identified
• Investment Review Committee prescreens
• Coaching sessions for selected companies
• Investment meeting with all the Angels
• Due Diligence Team
• Standard Terms but individual amounts
www.mapleleafangels.com | [email protected] | 416.646.6235 | @mapleleafangels
HOW MLA INVESTING WORKS
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www.mapleleafangels.com | [email protected] | 416.646.6235 | @mapleleafangels
INVESTMENT HISTORY
Sentient Magnetic
22 Investments$9.6 Million +
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www.mapleleafangels.com | [email protected] | 416.646.6235 | @mapleleafangels
WHAT ELSE? PATIENCE IS REQUIRED
• 1X typically takes 2.5 to 3 years• 10X is expected to take 4-5 years• 30X could take 8 years or more• Hint: Angels should not expect high portfolio yields
(IRR) after only three years of investing!
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www.mapleleafangels.com | [email protected] | 416.646.6235 | @mapleleafangels
DETERMINING S IZE OF ANGEL CHEQUES
• Invest in at least 8-10 deals (lifetime)• Average of two investments per company (many one
or two, but some three or more)• Allocate 20 investments in total
• Determine total personal assets set aside for angel investing (3-10% of total assets)
• Divide total commitment by 20 investments• Write cheques averaging this size for angel deals
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www.mapleleafangels.com | [email protected] | 416.646.6235 | @mapleleafangels
Clos ing Comments
• Angel Investing is a contact sport!• Direct correlation between the hours spent on Due
Diligence and IRR• You can expect to spend 40+ hours on Due Diligence
for each investment• Ongoing Support and Mentorship critical to the
success of ventures
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www.mapleleafangels.com | [email protected] | 416.646.6235 | @mapleleafangels
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