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Team -7

SUDERSHAN SHARMA -1226108251

LAWI ANUPAM -1226108221

K.S.SRINIVAS -1226108132

COMMON ANGELS

Fools rush in where angels fear to tread

GITAM INSTITUTE OF INTERNATIONAL BUSINESSVISAKHAPATNAM

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Investment Stages

Five Stages: Seed

Start-up

Early Expansion

Mezzanine/Bridge

Most VCs have a preference for a particular

investment stage.

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ValuationValuation

Stage Criteria Methodology Range

Seed - Mgmt. track record Comparables, $400K to$1.5MM- Market size/growth What's the going

- Competition rate in the region- Investment to date

Start-up - Market size/growth Comparables $750K to 2.0MM- Working prototype?- Team complete?

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ContdContd

Stage Criteria Methodology Range

Early - Market size/growth Comparables $1.5 to $5.0MM- Revenue run rate- Gross margin %

- Performance to date

Expansion - Revenue run rate - 1X sales Varies- Profitability ratios - EBIT multiple- Performance vs. plan

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The Role of the VC

Board involvement

Management recruitment

Future capital raising Access to business network

Strategy development

Patience

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How Do VCs MakeMoney? Collect management fees

from L.P.s - 2 1/2%

annually Share profits with L.P.s -

20/80 split on investmentgains

5%

95%

Mgmt. Fee Investment Gains

How do VCs earn

their income?

Source of VC Income:

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VCs focuses

Areas of Focus: Management

Marketplace

Competition

Business Economics

Risks

Venture capitalists tend to focus on five specificareas

when evaluating a company:

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The Venture Capital Process

Business Plan

First Meeting

Second Meeting

Term Sheet

Due Diligence Negotiations

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Exit Strategies

Sale or MergerMost likely exit Initial Public Offering

Small fraction go this way Redemption

Least attractive

Management buy-out

Generally not possible

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Introduction

Common Angels was founded in June 1998 and is headquartered in

Lexington, Massachusetts

Common Angels is a venture capital firm specializing in early stage

investments. The firm seeks to invest in software, telephony, semiconductors, RFID, and

medical devices not requiring extensive trials.

It primarily invests in companies based in Boston Area.

The firm typically invests in series A between $500,000 and $5 million with

the total investments less than $20 million.

The firm prefers to have a seat on the companys board of directors in its

portfolio companies.

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Three Exceptional Rules

1. Attract High Quality opportunities & Entrepreneurs

2. Able to access those opportunities & decide to allocate

scarce resources

3. Assist Entrepreneurs in building companies that enable

them & common Angles

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FACTS about COMMON ANGELS

Invested in more than 23 billions in more than50000 venture.

It had network of 70 accredited private investors.

Helped more than 115 companies. Out of which 100 were sold & 3went for IPO.

It had 70 members part time & full time members.38 limited

members.

All the members where interested in investing capital for the firms.

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Turning Point..

In 2000 due to dot com crash IT industry came to halt.

In April 2001 2002 360 companies where shut down.

Common Angels business also decreased from 2000 deals

to 700 deals & from $28.4 billions to $5 billions.

Then they thought of focusing on non-IT technologies

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