Presentation: Accessing Angel and Venture Capital
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Transcript of Presentation: Accessing Angel and Venture Capital
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ACCESSING ANGEL & VENTURE CAPITAL
A PRESENTATION TO
FROM
February 19, 2009Presented By:Jim NobleRegional CoordinatorNorthern Ontario Enterprise Gateway(705) [email protected]
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NOEG – An Overview
Incorporated non-profit with a volunteer board.
Funding from FedNor.
Mission to stimulate the flow of capital (equity)investment and management expertise from northern investors into high-growth potential Northern Ontario companies.
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NOEG – Accomplishing theMission.
Formation of local/regional angel investor networks.
Building links to other angel groups to increase investment capacity.
Help entrepreneurs prepare for investment – through our investor-ready programs.
Provide a process and link through which investor-ready entrepreneurs can access accredited investors.
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Angel/VC Investment Landscape
Angels48,000 Deals
$22-$24B
2004 Investment
In North America
VCs2,876 Deals
$21B
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The Traditional Funding Landscape – Where Angels &VC’s fit
HIGH
Level of Investment RiskAssumed byInvestor
Seed Start-Up Early Growth Established
Stage of
Business LOW
Founder/Friends/Family
Government.
Angels
VC’s
M&A/EquityMarkets
Commercial Banks
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The Funding Landscape“After the Meltdown”
HIGH
Level of Investment RiskAssumed byInvestor
Seed Start-Up Early Growth Established
Stage of
Business LOW
Founder/Friends/Family
Government.
AngelsVC’s
(VC Ghost Town)
M&A/EquityMarkets Closed
Commercial BanksMore Risk Adverse
The Funding Gap for Start-Up’s andEarly-Growth Companies is widening
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Impact on Entrepreneurs
o Cash is king (cash-flow)
o Must learn to bootstrap (do more with less)
o Valuations will be less
o Must be sure investors have deep enough pockets to get across the “funding gap”
o Harder to get funded
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Impact on Investors
Potential reduced investment capacity
Increased risk of dilution
Getting “stuck” with no exit
BUT – ANGELS ARE STILL INVESTING
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Angels & VC’sCompared & Contrasted
Angels V/C’s
Investment Invest their own money + mentoring
Invest other people’s money (institutions)
Funded Amounts $100,000 to $1.5 million (syndicating trend today in order to make larger investments)
+1.5 million +++
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Angels & VC’sCompared & Contrasted
Angels V/C’s
Key reasons to invest
Chemistry with management, detailed go-to-market strategy, rapid growth potential
Operating history, experienced management team, can scale, sustainable competitive advantage
Number of Investments each year
Less than VC’s – have luxury of being selective
More than angels, need to make a minimum number of investments in a given year
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Angels & VC’sCompared & Contrasted
Angels V/C’s
Terms Somewhat negotiable
Less negotiable
Post-money Valuations
Less than $3 Million
$5 million and above
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Contact Me:
Thank You and Questions
Jim Noble, NOEG Regional Coordinator bytelephone at 1-705-377-7600, toll free 1-866-924-7600 or through our website at www.noeg.ca.
Thank you.