angel investment decoded - [river city labs event]
DESCRIPTION
How to Apply to Brisbane Angels for Investment? Join us for an open discussion session that covers; What is Brisbane Angels What does the group look for in a venture What do some of the individual members look for when making their investment decision What makes a good application What is the application and investment process Post investment management The session will be moderated by John Mactaggart Chairman of the Brisbane Angels Group.TRANSCRIPT
How to Apply to Brisbane Angels for Investment
RiverCityLabs
Welcome!Who are we?We are a not for profit organisation, providing co-working space for start-ups and early stage companies in the technology, Internet, telecommunications and mobile sectors.
What do we offer?• Desk Space for $350/ mnth [ex GST] and includes; desk space, chair,
internet, access to all facilities, partnership offers, mentor network and business, technology and social events.
• NEW! Casual Pass $250/ mnth [ex GST] and includes; 24x7 access to the casual seating in the labs and status as a River City Labs Resident, including internet, access to all facilities, partnership offers, mentor network and business, technology and social events.
Finding your way around
• Bathrooms can be found out the exit door near the kitchen
• Emergency exit stairs out the back near the bathrooms or at the front as indicated in the picture
River City Labs respectfully asks you to place all your food and rubbish items in the bins provided and to not touch any property belonging to our residents or staff.
Have a great event!
Agenda
• Who are Brisbane Angels • What does the group look for in a venture• What do some of the individual members look
for when making their investment decision• What makes a good application• What is the application and investment
process• Post investment management
Agenda
• Who are Brisbane Angels • What does the group look for in a venture• What do some of the individual members look
for when making their investment decision• What makes a good application• What is the application and investment
process• Post investment management
Mission Statement
We are a community of active angel investors, investing time and
money into innovative start up ventures, to achieve outstanding
commercial success.
Group metrics
Formed late 2006 48 Members 10 Investee companies 20 transactions $2.6m invested
4 ITC 3 BioTech 1 AgriTech 1 BlueTech 1 Mining
Investment metrics
Smallest Investment $40,000 Largest Investment $400,000 Smallest pre-money $450,000 Largest pre-money $3.9M
Co-investment partners
• Gold Coast Angels• Bio Angels• Melbourne Angels• Wyoming Angels• Sacramento Angels• Huston Angel
Network• One ventures LP• Yuuwa Capital LP
Agenda
• Who are Brisbane Angels • What does the group look for in a venture• What do some of the individual members look
for when making their investment decision• What makes a good application• What is the application and investment
process• Post investment management
The group’s review criteria
• Novel intellectual property that can be leveraged to provide a strategic exit within 3-6 years.
• Reasonable market opportunity size to provide a projected exit of at least 10x to Angel investors.
• Active post investment management by Brisbane Angels or a co-investor.
Agenda
• Who are Brisbane Angels • What does the group look for in a venture• What do some of the individual members look
for when making their investment decision• What makes a good application• What is the application and investment
process• Post investment management
Nondisclosure Agreements (NDAs)
• Most angels and VCs will not sign NDA’s– May already have a potential conflict– See too many deals– Integrity is key to continuing business– Not motivated to steal technology
• May sign NDA…– During due diligence, not earlier– Covering a very narrow set of issues
• Bus Plan - no proprietary information
Why Investors Turn Down Deals
• Quality of Management • Size of Opportunity• Rate of Market Growth• Product Quality• Competition• Barriers to Entry• Stage of Development
Key Issues• The
Management • The Market• The Method• The Money• The Numbers
The Management
• Proven track record– Relevant business experience– In the industry, in a similar position– A failure can be significant (learning on someone else’s $$$)
• Integrity, dedication, commitment, passion• Vision and the ability to articulate it• Knowledge, skill level, intelligence• Leadership skill & ability to build a team
The Market
Macro • Size• Growth Rate• Concentration• Barriers to
Entry
Micro• Revenue Model• First-to-market• Economics (pricing)• Customers• Segmentation• Differentiation
The Method
• Business Model• Value Proposition• Distribution Strategy• Competitive Differentiation• Growth Strategy
Money
• Financial Strategy• Capital Requirements• Structure• Valuation• Exit Strategy
The Numbers
• Income Statement – Revenue Projections ($, units)– Timeliness of Revenues– Expenses Projections (head count, O/H)– Salary – Margins
More Numbers
• Balance Sheet– Cash– Accounts Receivables, Inventory (are they real)– Debt (usually not an issue, but...)– Liabilities
• Cash Flow– Operating (recent performance vs budget)– Financing
• Capitalisation Schedule
Agenda
• Who are Brisbane Angels • What does the group look for in a venture• What do some of the individual members look
for when making their investment decision• What makes a good application• What is the application and investment
process• Post investment management
First Impressions
• Clarity– Vision– Path
• Completeness– Business plan
• Transparency– Team– Numbers
Agenda
• Who are Brisbane Angels • What does the group look for in a venture• What do some of the individual members look
for when making their investment decision• What makes a good application• What is the application and investment
process• Post investment management
How Angel Groups Work: Typical Deal Process
SubmissionsOnline Only
(Gust)
Review committee pre-
screens submissions.
Screening TeamReview
Screening team votes on which companies to
invite to member meeting.
Member MeetingPresentations
Deal committee polls members for level of
investment interest in deals, recruits
diligence team, and facilitates selection of
deal lead to begin term sheet
negotiations.
Manage Investment
Deal lead represents member
interests and seeks an
attractive exit.
Deal lead closes transaction.
Diligence & TermSheet Negotiations
(Coordinated byDeal Lead)
Agenda
• Who are Brisbane Angels • What does the group look for in a venture• What do some of the individual members look
for when making their investment decision• What makes a good application• What is the application and investment
process• Post investment management
Ongoing commitment
We spend ~100 hours doing the deal and next several years engaged on a monthly and sometimes weekly basis with the company.
Benefits of informed investors
Mentoring, coaching and “value-added” services are contributions angel investors and angel groups can provide to the company.
Common Goal
Incredible Exits!
Valuation Estimator
http://www.caycon.com/valuation.php
Thank you
John MactaggartChairmanBrisbane Angels [email protected]