Angel Investing and Agriculture

Angel Investing and Agriculture Badger AgVest, LLC An Investor Alliance for Agriculture James Hanke, Director www.badgeragvest.com Badger AgVest, LLC www.badgeragvest.com Angel Investing and Agriculture  Angel Investing Overview Badger AgVest Overview Issues and Opportunities   Badger AgVest, LLC www.badgeragvest.com What is Angel Investing?  SEC Regulation D  Allows companies to sell unregulated securities to Accredited Investors Defined as individuals with a net worth of $1 million, or annual income of $300k  Accredited Investors   Accredited Investors take equity commitments in early-stage companies Badger AgVest, LLC www.badgeragvest.com 10 – 20 Percent Rule  Early-Stage investments are high-risk, high-reward investments As a general rule investors should invest no more than 10-20% of their total investment portfolio in angel investing  Badger AgVest, LLC www.badgeragvest.com Financing Life Cycle Proof of Product Product Manufacturing Concept Design Development Delivery _______________________________________________________________ Idea Pre-Seed Fund Seed Funding Start Up Funding Expansion Discovery Operating Capital Founder Family & Friends Venture Funds Angels Angel Groups Institutional Equity Loans / Bonds Seed Funds Badger AgVest, LLC www.badgeragvest.com Capital Gap     Notion that Venture Capitalists fund most early stage ventures is false VC’s and Angels fund similar companies, but at different stages Companies need Angel to fill the capital gap between prototype development and achieving significant sales In the first half of 2006, Angel Investors funded 24,500 early-stage ventures with $12.6 Billion (VC’s funded .3 Billion) Badger AgVest, LLC www.badgeragvest.com Expected Rate of Return    Angels expect an annualized rate of return of 20-25% Results from a combination of high returns and total losses 10 investments equals:    4 losses 3 break-evens 3 home runs www.badgeragvest.com Badger AgVest, LLC Badger AgVest, LLC  An Investor Alliance for Agriculture Designed to provide members an opportunity to make angel investments in Wisconsin-based, ag-oriented companies Tool to rationalize the process of connecting investors to viable Wisconsin investments Badger AgVest, LLC www.badgeragvest.com   Badger AgVest Mission  To promote the development of successful agricultural businesses that directly benefit Wisconsin producers and our rural economy Support innovation and emerging technologies that bring value to agrelated businesses Badger AgVest, LLC www.badgeragvest.com  Membership    70+ members to date Members pay a one-time membership fee Members make their own investment decisions – not all members elect to invest in each opportunity Badger AgVest, LLC www.badgeragvest.com Why Badger AgVest?       Rationalizes the process of connecting investors to early-stage companies Coordinated deal flow, company analysis Ability to deliver larger traunches of equity Time-saving Ag producers know the ag industry WI ACT 255 Tax Credits Badger AgVest, LLC www.badgeragvest.com Opportunities in Agriculture      Clean Technologies Bio Herd management Organics Alternative Energy Badger AgVest, LLC www.badgeragvest.com