Angel Happy Hour. Peter Adams Executive Director, RVC

Transcription

1 Angel Happy Hour Peter Adams Executive Director, RVC

2 RVC Upcoming Events 27 th Colorado Capital Conference Monday, October 12 th 5:00pm to 8:00pm Tuesday, October 13 th All Day!

3 RVC Hyper-Accelerator 2016 The Ability to Accelerate at Extraordinary Speed The Six Day Startup Zero to Pitch in Six Days January

4 What is an angel investor?

5 What is an angel investor? Types of angel investors FFF Friends, Family and Fools Accredited or non-accredited Casual Angels Professional Angels Angel Groups

6 Why be an angel investor? Shifts in early stage investing have opened up a window for angels Give back to entrepreneurial community Share capital, expertise and connections Make 20-30% returns Remain engaged in entrepreneurship after exit Participate in a community

7 Why be an angel investor?

8 Distribution of Returns by Venture Investment 60 3 yr Percent of Total Exits % - 0X 3.3 yr Overall Multiple: 2.6X Avg Holding Period: 3.5 years Average IRR: 27% yr 4.9 yr 6 yr < 1X 1X to 5X 5X to 10X 10X to 30X > 30X Source: Returns of Angels in Groups, 2007 Exit Multiples

9 Angels Fund Nearly All Seed/Early-Stage Deals Number of Deals in 2012: Angel Investment and Venture Capital 25,000 20, ,647 1,796 Venture Capital Angel Investment 15,000 10,000 24,131 22,790 20,109 VC Total = 1,927 5,000 Angel Total = 46,921 0 Startup/Seed Early Stage Expansion/Later Without angels few startups would make it to VC, PE or IPO funding Source: Jeffrey E. Sohl, Center for Venture Research and 2013 NVCA Yearbook

10 Angels Provide Less Equity by Total Angel Investors ($23B) Dollars BUT Venture Capital ($27B) Private Equity ($347B)

11 Financing Life Cycle Discovery Proof-of Concept Product Design Product Development Manufacturing/ Delivery Idea Pre-seed Funding Seed Funding Start-up Funding Expansion/Mezzanine Operating Cap. Founder Friends and Family Angels Angel Groups Venture Funds Institutional Equity Loans / Bonds Seed Funds

12 Companies Backed by American Angels

13 Why Join an Angel Group?

14 How Much Does This Ox Weigh?

15 How Much Does This Ox Weigh?

16 Angel Groups are Key Trend in Sophisticated Investing Growth in Number of American Angel Groups Sources: Center for Venture Research (pre 03 data) and Kauffman Foundation/ARI (04-13 data)

17 Angel Groups Take Professional Approach 8.7 Million Total US Accredited Individuals 265K Active Angels 15K Investors in Angel Groups Sources: SEC proposed rule, Center for Venture Research, academic studies, 2012 Experienced, Accredited Investors Successful Entrepreneurs/Business People Median Years Investing 9 Median Number of Investments 10 Invest Where We Live & In What We Know Main Street Not Wall Street 300+ Groups In Every State Work as a Team Focused on Best Practices Deal Screening Due Diligence Term Sheets Valuation Support Companies We Invest In Board Seats and Advisory Boards Contacts, Advice, Recruiting, Strategy Follow-on Funding and Exits

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19 Angel Group Evaluation & Investment Process Submissions (~30 Plans Per Month) Screening Team Review (5 10 Plans Per Month) General Meeting Presentations (1 3 Plans Per Month) Diligence & Term Sheet Negotiations (Coordinated by Managing Director & Deal Lead) Manage Investment Managing Director prescreens ed submissions. Screening team votes on which companies to invite to general meeting. Managing Director polls members for level of investment interest in deals, recruits diligence team, and facilitates selection of deal lead to begin term sheet negotiations. Deal lead closes transaction and the sidecar fund invests in companies that attract at least $250K in investment from at least 5 members. Board member represents member interests and seeks an attractive exit. Source: James Geshwiler, CommonAngels, Boston

20 Rockies Venture Club Angel Investment Process Pitch Investor Interest Deep Dive Due Diligence Term Sheet Form LLC Open House

21 ROCKIES VENTURE FUND I Colorado Early Stage Angel Co-Investment Opportunity Overview

22 Why Colorado? A strong, constantly evolving tech environment Colorado houses existing tech giants such as IBM, Oracle and Lockheed Martin, as well as an emerging and thriving startup scene. Denver has more tech startups per capita than any U.S. metropolitan area, including SendGrid, Ping Identity, Rally Software (which went public on NASDAQ this year; RALY),Sympoz, Datalogix, Newsgator, Track Via, Convercent, Printfection,rentbits, and hundreds more.

23 Top 10 Metro Areas for High-Tech Startup Density 1. Boulder, Colo. 2. Fort Collins-Loveland, Colo. 3. San Jose-Sunnyvale-Santa Clara, Calif. 4. Cambridge-Newton-Framingham, Mass. 5. Seattle, Wash. 6. Denver, Colo. 7. San Francisco, Calif. 8. Washington-Arlington-Alexandria, DC-Va.-Md. 9. Colorado Springs, Colo. 10. Cheyenne, Wyo.

24 RVF Competitive Advantage Access to High Quality Deal Flow Leveraging a 30 year history in Colorado Expert Decision Making Experienced Board Access to angel networks to tap into expertise of a broad range of Subject Matter Experts Access to angel networks nationwide to syndicate and collaborate on deals and due diligence.

25 Fund Overview Angel Investment Fund Early Stage Companies Co-Investment with Angels $2-$10 million Fund Size >$500K average investment 25-50% of fund reserved for follow-on $250K Unit investment from LPs 80% minimum fund allocation to Colorado Companies Ten year fund life cycle

26 AngelList Syndication Strategy Limited Partner Friendly Potential to Double returns on each deal LPs Share in Carried Interest

27 AngelList Syndication Strategy: How we turn 3X into 6.5X Fund Leads with $50K Investment in $550K Syndicate Deal Exits at 3X or $1.65 Million Fund Receives $150K from Lead Investment PLUS $225,000 from 15% carried interest. Total Return on $50K investment is more than doubled to $375,000.

28 ROCKIES VENTURE FUND I Contact Us: info@rockiesventurefund.org

29 Angel Happy Hour Peter Adams Executive Director, RVC