Jon ason (it spring 2013)

03/2013 Copyright 2013 - John Ason 1

John Ason

Angel Investing


Angel Investing


Personal Background

25 years AT&T Bell Labs experience

Successful in stock market

Angel investor last 17 years


Angel Investments

Xlibris.com Scoople.it DoodleDeals.com

Koding.com GetMaid.com ERANYC.com

Centrak.com OffTrackPlanet.com Ology.com

Diapers.com HotList.com Imbookin.com

CallunaVineyards.com Tips.by Spling.com

WeHostels.com LiveLook.com Bikini.com FulcrumGallery.com Geometrix SpatialLabs

AdPilot Hooja MotionMathGames.com

AppyCouple.com PhlatBall.com IvyExec.com


What is Angel Investing ?

Source of funds for early stage companies

Typically first “professional” level

Typically $100,000 to $500,000

Experience / assistance provided


Angel Profile

Usually private

Ability to accumulate capital

Retired professionals

Entrepreneurs

Financial return secondary concern


What do Angels Want ?

A pleasant experience

Excitement of growing a company

Financial return

An environment to contribute / participate

Management / oversight

Contacts

An exit strategy


Exit Strategies (descending order)

Chapter 11 / Disbanding

Life style (put option)

Buyout / Merger

Venture Capital round

IPO


How to Find Angels ?


How to Find Angels ?

Networking

Venture groups

Venture fairs

Internet

University lectures

Intermediaries


What do Angels Want to See ?

Short focussed business plan

Quality management / people

Reasonable valuation (20-30% equity)

Market validation


Negotiating with Angels

Must be win / win

Process is asymmetrical

Valuations fuzzy

Angel contribution fuzzy

Angels timeframe is casual / slow

Angels do not HAVE to invest

Angels can walk away at anytime


Financial Returns

Ten times investment in 3 to 5 years

50% IRR per year

Lifestyle companies do not qualify


Company Culture

Speed, speed, speed

Outsource everything

Leverage / margins

Compete / cooperate

Open non-secretive


Angels VS VCs

Money Own Other people’s

Revenues None $2 – 5 million

Management Partial Complete

Stage Early Expansion

IRR 50% 30%

Multiples 10X 2X – 4X

Risk High Low


Evaluation Process

Clear, concise, compelling, coherent one page executive summary

Very large potential (10X)

Intellectually stimulating

Marketing/sales skills

Fundamental keystone patent

Execution capabilities


Exploding Angel Market

Starting a company close to zero

Validating a company close to zero

Emergence of accelerators

Emergence of Super Angels (Micro VCs)

Emergence of AngelList

Emergence of graphical investor decks

Emergence of family offices

Dramatic increase in speed of angel investing


International Activity

Startups are outsourcing

Foreign startups looking for funding

Foreign governments looking to build angel and startup ecosystems

Accelerators going international


Thank You

John Ason

www.JohnAson.com

[email protected]

Jon ason (it spring 2013)

Education

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