pre-seed stage seed/start-up stage funding gap early stage later stages founders ’ friends &...
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Pre-seed Stage
Seed/Start-up Stage
FUNDING GAP
Early Stage
Later Stages
Founders’ Friends &
Family
AngelInvestors
Very few angel deals done above $1
million
Very few VC deals done below $4 million
Venture Capitalists
$0 $250K $1.5 million $4 million $10 million & up
Financing Life Cycle
DiscoveryProof-ofConcept
ProductDesign
ProductDevelopment
Manufacturing/Delivery
Idea Pre-seedFunding
Seed Funding
Expansion/MezzanineOperating Cap.
Friends and Family
Angels
Seed Funds
Venture FundsFounder
Institutional Equity
Loans / BondsAngel Groups
Start-up Funding
SBIRPhase I Phase II
New Company Formation (USA)
Source of Equity Funds – Typical Year
0 100,000 200,000 300,000 400,000 500,000
500 Classic VCs
1000-2000 Seed Funds
>50,000 Angels
>200,000 Friends & Family
500,000 Startup Companies
Source: Business Dynamics Statistics Briefing: Jobs Created from Business Startups in the United States. Kauffman Foundation, January 2009.
HAIL TO THE JOB CREATORS
Who are Angel Investors?• Often successful, exited entrepreneurs or retired business
persons – Active investors– Invest both time and money in companies
• Accredited investors - SEC definition (US & a few others)• Invest their own money (not money managers)• Generally invest in local companies• Invest at least $20K in businesses not run by family
Angels Fund Majority of Startups in US
Sources: Center for Venture Research/ UNH; NVCA 2013 Yearbook; PwC MoneyTree
• $22.9 billion• 67,030 deals• 23,460 seed• 22,129 early stage• 21,441 expansion • > 268,000
individuals
Angel Investors (2012) • $26.7 billion
• 3,723 deals• 280 seed• 1,647 early stage• 1,796
later/expansion• 522 active firms
Venture Capital (2012)
Angels Provide ~90% of Outside Equity for Startups
20,02924,035
11,445
309
889
1,604
0
5,000
10,000
15,000
20,000
25,000
30,000
Startup/ Seed Early Stage Expansion/ Later
Venture Capital
Angel Investment
Angels Invest in the Majority of Startup & Early Stage Deals
Number of Deals in 2009: Angel Investment and Venture Capital
Source: Jeffrey E. Sohl, Center for Venture Research and 2010 NVCA Yearbook
Angel Capital Association Today• Mission: Fuel the success of angel groups and private
investors who actively invest in early-stage companies• 185 member angel groups• 8,500+ accredited investors• 20 affiliated organizations• 51 states/ provinces• Charitable partner:
Median Angel Round Size Dips Slightly for the Year…
2010 2011 2012$0.00
$0.50
$1.00
$1.50
Median Round Size Mean Round Size
10
*Angel rounds include angels & angel groups only
$980K$900K
$990K
$500K
$625K $600K
$M
Median Early Stage Pre-Money Valuation Stays the Same in 2012
11
*Including all rounds with angel groups before Series A
$2.5MMedian
$1.5M1st Quartile
$3.7M3rd Quartile
$0.11M
$6.6M
2011 20120%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
32.8% 31.9%
24.6%20.9%
9.3%13.3%
7.5% 6.0%1.5% 3.8%3.5% 5.3%4.6% 4.5%
16.2% 14.2%Other
Software
Consumer Pdcts & Svcs
Electronics
Industrial
Mobile & Telecom
Healthcare
Internet
Share of Mobile Deals Grows, Healthcare ShrinksShare of Angel Group Deals by Sector 2012 vs 2011
12