accessing angel & venture capital a presentation to from february 19, 2009 presented by:
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ACCESSING ANGEL & VENTURE CAPITAL
A PRESENTATION TO
FROM
February 19, 2009Presented By:Jim NobleRegional CoordinatorNorthern Ontario Enterprise Gateway(705) 377-76001-866-924-7600noeg@amtelecom.netwww.noeg.ca
02/19/08 Accessing Angel & Venture Capital 2
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.
02/19/08 Accessing Angel & Venture Capital 3
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.
02/19/08 Accessing Angel & Venture Capital 4
Angel/VC Investment Landscape
Angels48,000 Deals
$22-$24B
2004 Investment
In North America
VCs2,876 Deals
$21B
02/19/08 Accessing Angel & Venture Capital 5
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
02/19/08 Accessing Angel & Venture Capital 6
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
02/19/08 Accessing Angel & Venture Capital 7
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
02/19/08 Accessing Angel & Venture Capital 8
Impact on Investors
Potential reduced investment capacity
Increased risk of dilution
Getting “stuck” with no exit
BUT – ANGELS ARE STILL INVESTING
02/19/08 Accessing Angel & Venture Capital 9
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 +++
02/19/08 Accessing Angel & Venture Capital 10
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
02/19/08 Accessing Angel & Venture Capital 11
Angels & VC’sCompared & Contrasted
Angels V/C’s
Terms Somewhat negotiable
Less negotiable
Post-money Valuations
Less than $3 Million
$5 million and above
02/19/08 Accessing Angel & Venture Capital 12
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.
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