8/9/2019 TOFI April 13, 2015 Bootstrapping: Navarro

http://slidepdf.com/reader/full/tofi-april-13-2015-bootstrapping-navarro 1/21

   ©

   N  a   t   i  o  n  a   l   A  n  g  e   l   C  a  p   i   t  a   l   O  r  g

  a  n   i  z  a   t   i  o  n

Touched by an Angel

…what to expect when raising an Angel

investor round.

 April 13, 2015

8/9/2019 TOFI April 13, 2015 Bootstrapping: Navarro

http://slidepdf.com/reader/full/tofi-april-13-2015-bootstrapping-navarro 2/21

   ©

   N  a   t   i  o  n  a   l   A  n  g  e   l   C  a  p   i   t  a   l   O  r  g

  a  n   i  z  a   t   i  o  n

Who or what are Angel investors?

• Defined by NACO as an individual who makes arms-lengthinvestments into promising high growth companies

• Often the first source of private capital an into a company

• Invests using a combination of their own capital (not OPM),experience and networks

• Private individuals - culture reliant on social networks

• The CSE requires that an Angel investor be an accredited investor

in accordance with national instrument 45-106

8/9/2019 TOFI April 13, 2015 Bootstrapping: Navarro

http://slidepdf.com/reader/full/tofi-april-13-2015-bootstrapping-navarro 3/21

   ©

   N  a   t   i  o  n  a   l   A  n  g  e   l   C  a  p   i   t  a   l   O  r  g

  a  n   i  z  a   t   i  o  n

Depends on who you ask

8/9/2019 TOFI April 13, 2015 Bootstrapping: Navarro

http://slidepdf.com/reader/full/tofi-april-13-2015-bootstrapping-navarro 4/21

   ©

   N  a   t   i  o  n  a   l   A  n  g  e   l   C  a  p   i   t  a   l   O  r  g

  a  n   i  z  a   t   i  o  n

Why and how do Angels invest?

Top Reasons for Investing

1. Want to support and mentor entrepreneurs

2. Want to stay connected to their industry

3. Want a return on investment

Investment Practices

• Most often invest alone

• More often co-investing in syndicates, following a lead investor

• Increasingly are joining formal Angel groups to leverage theknowledge and experience of peers

8/9/2019 TOFI April 13, 2015 Bootstrapping: Navarro

http://slidepdf.com/reader/full/tofi-april-13-2015-bootstrapping-navarro 5/21

   ©

   N  a   t   i  o  n  a   l   A  n  g  e   l   C  a  p   i   t  a   l   O  r  g

  a  n   i  z  a   t   i  o  n

When do Angels invest?

Lead Angel investors will not invest until they:

1. Find an entrepreneur or team they can work with and mentor

2. …working on a company with measurable traction

3. …in their industry of expertise

4. …can see the path to a significant ROI at exit

5. …know how to help get to the exit

Not usual ly about yo ur idea! 

8/9/2019 TOFI April 13, 2015 Bootstrapping: Navarro

http://slidepdf.com/reader/full/tofi-april-13-2015-bootstrapping-navarro 6/21

   ©

   N  a   t   i  o  n  a   l   A  n  g  e   l   C  a  p   i   t  a   l   O  r  g

  a  n   i  z  a   t   i  o  n

Canadian Angel Investors Fill the Funding Gap

8/9/2019 TOFI April 13, 2015 Bootstrapping: Navarro

http://slidepdf.com/reader/full/tofi-april-13-2015-bootstrapping-navarro 7/21

   ©

   N  a   t   i  o  n  a   l   A  n  g  e   l   C  a  p   i   t  a   l   O  r  g

  a  n   i  z  a   t   i  o  n

Where are Angel investors?

• The Ontario Securities Commission (OSC) estimates there arebetween 300,000 - 800,000 accredited investors in Canada

• Visible Angel groups represent <10% of the total asset class size

• NACO estimates there are between 20 – 50 thousand Angelinvestors in Canada

• NACO represents 2100 investors and 32 Angel groups acrossCanada

8/9/2019 TOFI April 13, 2015 Bootstrapping: Navarro

http://slidepdf.com/reader/full/tofi-april-13-2015-bootstrapping-navarro 8/21

   ©

   N  a   t   i  o  n  a   l   A  n  g  e   l   C  a  p   i   t  a   l   O  r  g  a  n   i  z  a   t   i  o  n

NACO’s National Network of Investors

8/9/2019 TOFI April 13, 2015 Bootstrapping: Navarro

http://slidepdf.com/reader/full/tofi-april-13-2015-bootstrapping-navarro 9/21

   ©

   N  a   t   i  o  n  a   l   A  n  g  e   l   C  a  p   i   t  a   l   O  r  g  a  n   i  z  a   t   i  o  n

Select NACO Member Groups

8/9/2019 TOFI April 13, 2015 Bootstrapping: Navarro

http://slidepdf.com/reader/full/tofi-april-13-2015-bootstrapping-navarro 10/21

   ©

   N  a   t   i  o  n  a   l   A  n  g  e   l   C  a  p   i   t  a   l   O  r  g  a  n   i  z  a   t   i  o  n

What does an Angel investor look like?

8/9/2019 TOFI April 13, 2015 Bootstrapping: Navarro

http://slidepdf.com/reader/full/tofi-april-13-2015-bootstrapping-navarro 11/21

   ©

   N  a   t   i  o  n  a   l   A  n  g  e   l   C  a  p   i   t  a   l   O  r  g  a  n   i  z  a   t   i  o  n

Cold Hard Truths About Angel Investment

8/9/2019 TOFI April 13, 2015 Bootstrapping: Navarro

http://slidepdf.com/reader/full/tofi-april-13-2015-bootstrapping-navarro 12/21

   ©

   N  a   t   i  o  n  a   l   A  n  g  e   l   C  a  p   i   t  a   l   O  r  g  a  n   i  z  a   t   i  o  n

Data on Angel Investment (2014)

1. Number of applications received: 2,972

2. Probability of being invited to pitch: 23%

3. Probability of securing investment: 8%

Investment

• Avg Round: $883K

• Avg Group Investment: 160K

• Avg Investment: $50K

• Median Valuation: $4M

8/9/2019 TOFI April 13, 2015 Bootstrapping: Navarro

http://slidepdf.com/reader/full/tofi-april-13-2015-bootstrapping-navarro 13/21

   ©

   N  a   t   i  o  n  a   l   A  n  g  e   l   C  a  p   i   t  a   l   O  r  g  a  n   i  z  a   t   i  o  n

Funding Rates and Exits

8/9/2019 TOFI April 13, 2015 Bootstrapping: Navarro

http://slidepdf.com/reader/full/tofi-april-13-2015-bootstrapping-navarro 14/21

   ©

   N  a   t   i  o  n  a   l   A  n  g  e   l   C  a  p   i   t  a   l   O  r  g  a  n   i  z  a   t   i  o  n

…but, Access to capital is rising in Canada!

8/9/2019 TOFI April 13, 2015 Bootstrapping: Navarro

http://slidepdf.com/reader/full/tofi-april-13-2015-bootstrapping-navarro 15/21

   ©

   N  a   t   i  o  n  a   l   A  n  g  e   l   C  a  p   i   t  a   l   O  r  g  a  n   i  z  a   t   i  o  n

Investment is growing…

8/9/2019 TOFI April 13, 2015 Bootstrapping: Navarro

http://slidepdf.com/reader/full/tofi-april-13-2015-bootstrapping-navarro 16/21

   ©

   N  a   t   i  o  n  a   l   A  n  g  e   l   C  a  p   i   t  a   l   O  r  g  a  n   i  z  a   t   i  o  n

…Valuations and round sizes are too

8/9/2019 TOFI April 13, 2015 Bootstrapping: Navarro

http://slidepdf.com/reader/full/tofi-april-13-2015-bootstrapping-navarro 17/21

   ©

   N  a   t   i  o  n  a   l   A  n  g  e   l   C  a  p   i   t  a   l   O  r  g  a  n   i  z  a   t   i  o  n

…More investors are syndicating together.

8/9/2019 TOFI April 13, 2015 Bootstrapping: Navarro

http://slidepdf.com/reader/full/tofi-april-13-2015-bootstrapping-navarro 18/21

   ©

   N  a   t   i  o  n  a   l   A  n  g  e   l   C  a  p   i   t  a   l   O  r

  g  a  n   i  z  a   t   i  o  n

What does it all mean?

1. Set realistic expectations

2. Educate yourself on comparable companies and markets

3. Prepare for multiple investors and multiple rounds

4. Raise only what you need until the next milestone

5. Value execution, not the idea

6. Find mentors who can become your lead Angel, before you need

the money7. Look at the big picture, but don’t give up your shirt!

8/9/2019 TOFI April 13, 2015 Bootstrapping: Navarro

http://slidepdf.com/reader/full/tofi-april-13-2015-bootstrapping-navarro 19/21

   ©

   N  a   t   i  o  n  a   l   A  n  g  e   l   C  a  p   i   t  a   l   O  r

  g  a  n   i  z  a   t   i  o  n

How do I meet an Angel?

1. Register your business on-line (Angel list, Gust, crowdfunding, etc.)

2. Join an accelerator or incubator program

3. Contact a NACO industry partner

4. Contact your local Angel investor group or network

5. Talk to a VC (or two, or five…)

6. Talk to other entrepreneurs who are funded

7. Cold call an investor you know about(but don’t waste their time and yours)

Introd uct io ns (and who makes them) are imp ortant! 

8/9/2019 TOFI April 13, 2015 Bootstrapping: Navarro

http://slidepdf.com/reader/full/tofi-april-13-2015-bootstrapping-navarro 20/21

   ©

   N  a   t   i  o  n  a   l   A  n  g  e   l   C  a  p   i   t  a   l   O  r

  g  a  n   i  z  a   t   i  o  n

Select NACO Partners

8/9/2019 TOFI April 13, 2015 Bootstrapping: Navarro

http://slidepdf.com/reader/full/tofi-april-13-2015-bootstrapping-navarro 21/21

   ©

   N  a   t   i  o  n  a   l   A  n  g  e   l   C  a  p   i   t  a   l   O  r

  g  a  n   i  z  a   t   i  o  n

Thank You