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                                                     STEPSTONE ANGELS
                                                     An Indiana Company
                                                351 West 10th Street, Suite 311
                                                    Indianapolis, IN 46202

Prospective Member:

We are pleased to introduce to you StepStone Angels. StepStone Angels was formed in 2008 to bring
together high net-worth individuals who are interested in learning about unique investment
opportunities in early stage growth companies. Periodically, presentations will be made to the members
of StepStone Angels, each of whom will then make an individual investment decision based upon the
opportunity presented. Other than your annual membership fee, you will not be asked to contribute
any money towards any investment opportunity unless you decide to do so.

The manager of StepStone Angels, StepStone Business Partners LLC (“StepStone”), will be primarily
responsible for identifying and investigating potential investment opportunities and coordinating the
presentation of those opportunities to the members. Your annual membership fee will be used, in part,
to compensate StepStone for these management services.


To become a member of StepStone Angels, please complete the attached Membership Agreement and
Membership Survey and forward the completed application, along with your first year annual
membership fee, to StepStone Angels at the address set forth on the Agreement.

The following pages explain more fully the vision and goals of StepStone Angels, as well as the general
structure of the investments to be presented. We thank you for your interest, and would like to extend
a special invitation to you to become a member of this exclusive group of investors.


                                                           Oscar Moralez, Managing Partner

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                                                Investment Philosophy

StepStone Angels was formed in 2008 for the purpose of bringing together high-net-worth individuals
interested in learning about investment opportunities. The investment opportunities are intended to
feature companies located in the Midwest region (primarily Indiana, Ohio, Michigan, Illinois and
Kentucky) with a focus on early stage life sciences companies. StepStone Angels will target investments
in promising young companies at a funding stage between “friends and family” and venture capital
financing. Initially, StepStone Angels anticipates that its members will make (in the aggregate) three to
five investments annually each in the range of $100,000 to $500,000. The number and size of deals is
expected to grow as the membership grows and as more resources are brought into StepStone.

We expect that the members of StepStone Angels will typically hold lead investment positions in the
financing round and may sometimes even be the sole investor. Each investment will have both a debt
and equity component. We expect that initial investments in most early stage companies will be made
in the form of promissory notes convertible at the option of the holders into equity of the company.
The notes will likely be of a short duration with the intention of providing bridge financing to companies
prior to their transition to more permanent or institutional financing. The reason for this proposed
structure is that most companies at this stage of maturity lack credible valuations and, as a result, a
great deal of time and energy can be needlessly spent with the company in trying to agree on a
valuation. We believe that a bridge note investment will protect the investors against both uncertain
and rapidly changing valuations and the unknowns of future “institutional” investment. However, we
still expect that some investment opportunities will allow the participant investors to make more
traditional equity investments because the presenting company has a credible valuation method.

                                                Structure of Investments

On a regular basis, StepStone will coordinate and host breakfast, lunch or dinner meetings to allow the
members of StepStone Angels to network and to entertain presentations by various entrepreneurs
seeking financing. It is anticipated that these prospective investment opportunities will be identified by
StepStone. Members are also encouraged to recommend presenting companies for consideration.
Following these meetings, members will be asked to make a nonbinding indication of interest with
respect to the investment opportunity presented. Members will not be required to invest in any
minimum number of investment opportunities; rather, members will make each investment decision
in their sole and absolute discretion.

If the members of StepStone Angels indicate enough interest in the investment opportunity to make an
aggregate investment of greater than $100,000, StepStone will organize the interested investors and will
lead a due diligence committee. Following the completion of due diligence to the satisfaction of the
committee, StepStone will begin negotiations with the entrepreneur relating to the investment.
StepStone will inform each member who indicated an interest in the investment opportunity as to the
proposed structure of the investment. Each member will then have a final opportunity to make the
investment. Members may withdraw an indication of interest at any time and for any reason.

StepStone Business Partners, LLC - Winter2008
If members of StepStone Angels ultimately decide to make an investment, StepStone will create a single
purpose Limited Liability Company (LLC) for that investment. StepStone will serve as the managing
member and, as compensation for its management services, will receive a 5-10% equity interest in the
LLC. The remaining LLC interests will be distributed to the investing members on a pro rata basis based
upon each member’s contribution to the investment.

                                                Biographies of Management

                                Oscar Moralez, MBA – Managing Partner & Co-founder

Oscar Moralez received his bachelor’s of science degree in medical technology from the University of
Texas, Southwestern Medical Center at Dallas and is a board certified medical technologist with the
College of American Pathologists. He also holds a master’s degree in business administration (MBA)
from the University of Colorado.

After co-founding StepStone Business Partners in 2008, Mr. Moralez served as interim President and
CEO of MicaGenix Inc., an Indianapolis based clinical research organization (CRO) that provides genetic
toxicology services to pharmaceutical companies. From 2002-2007, Moralez served as Chief Operating
Officer of BioStorage Technologies in Indianapolis which he founded in 2002. It is one of the largest
privately held biorepositories in the world with locations in the US and Europe. At BioStorage, Moralez
helped lead the company in successfully raising over $3 million in angel equity financing and over $8
million in venture capital financing.

In addition to these ventures, Moralez also brings a diverse background in clinical laboratory medicine,
with experience in global clinical research organizations as well as hospital and reference laboratory
environments. He has over 15 years of managerial and business development experience in the life
science industry including executive level management, sales and marketing, information technology
and operations.

Prior to founding BioStorage, Moralez served as director of specialty services at Covance Central
Laboratories in Indianapolis. Moralez was also the general manager for Frontline Laboratory Network, a
Colorado-based startup venture consisting of a consortium of hospital laboratories and Mayo Medical
Laboratories. Prior to this, he worked in various positions at Boulder Community Hospital in Boulder,

                                     Steven F. Isenberg M.D., - Partner & Co-founder

Steven F. Isenberg, MD is a graduate of Indiana University and the Indiana University School of
Medicine. Dr. Isenberg provided the angel investment for Zotec Partners, LLC, in December, 2001. Since
then, ZP has grown to become one the largest privately companies in the world specializing in medical
billing and medical billing software. Dr Isenberg has also served on boards of Artistic Media Partners, a
privately held radio station company, the American Academy of Otolaryngology-Head and Neck Surgery,
and on the medical advisory board of Oxford Finance. He founded Physicians Surgery Center
Development Company in 1997 that has provided investors with outstanding returns since 1997. Dr

StepStone Business Partners, LLC - Winter2008
Isenberg has served as the Co-Director of the POINT Project at Harvard University, an on-line outcomes
registry, and as President of Surgeons Outcomes Research Cooperative (SOURCE) in Otolaryngology at
Duke University. He has served on the Board of Directors and Professional Standards Committee of the
Indianapolis Medical Society, President of Alpha Omega Alpha, the national medical honorary, received
the Indiana University School of Medicine Dean’s Award in 1975 and the Otis Bowen Distinguished
Leadership Award in 2002 and 2003, and served as President of the Indiana University School of
Medicine’s Deans Council from 2004 to 2007. Dr Isenberg has run a successful solo medical practice
since 1979 and is experienced in all aspects of business management. He is currently serving as the CEO
of Apricity LLC, the owner of a patented medical product (HeatTreat®). He is also the co-founder of
DocInvent LLC, the owner of the patented medical product (NasoNeb®).

Dr. Isenberg is the editor of Managed Care, Capitation and Outcomes: A Practical Guide (Thieme
Publishers, 1997, New York, NY), and the co-editor of Profiting From Quality: Outcome Strategies for
Medical Practice (Jossey-Bass, San Francisco, 1999).He is an Assistant Professor of Otolaryngology-Head
and Neck Surgery at the Indiana University School of Medicine.

                                                Compensation of Management

StepStone will derive its operating income from a combination of annual membership fees as well as
consulting and management fees charged to companies receiving funding. The annual membership fee
charged to members is due and payable each year on the anniversary date of the member’s acceptance.
Members can withdraw from membership at any time, but will not be entitled to a refund of any portion
of the initiation or the annual fee.

The fees collected from the members of StepStone Angels will be used as follows:

    •     The annual membership fees will be used to support the StepStone staff in managing existing
          day to day operations of StepStone, including salaries, office rent, marketing, and general

    •     Membership fees will also be used to reimburse StepStone for costs associated with identifying
          new angel members and for researching and identifying new presenting companies thus
          ensuring a steady, high-quality deal flow for its members.

    •     The membership fees will also be used to organize and host angel investor meetings and other
          educational and economic development promotions.

                                                Membership Terms and Benefits

    •     Opportunities to network with StepStone Angels members in a group setting;

    •     Exclusive access to high quality presenting companies on a regular basis;

    •     Coordination of the due diligence process by StepStone and the provision of critical information
          to help investors make sound business decisions;

StepStone Business Partners, LLC - Winter2008
    •     Active participation at your discretion in the due diligence process;

    •     Final decision making with respect to all investment opportunities;

    •     Opportunities to utilize the Indiana Venture Capital Tax Credit on qualified investments; and

    •     Professional report management on all investments made through StepStone Angels.

Membership in StepStone Angels will be limited to “accredited investors” as defined in the Securities Act
of 1933 and the regulations issued hereunder. A complete definition of accredited investors is set forth
in the application to join StepStone Angels. Members should anticipate making $25,000 to $100,000
contributions annually in high-risk equity investments, although no minimum investment is required to
maintain membership in StepStone Angels. Members will be expected to attend meetings, ask
questions of presenting entrepreneurs, indicate serious interest in deals, participate in due diligence on
potential investments and to submit deals with which they are familiar.

Membership in StepStone Angels requires the payment of an annual Membership Fee of $2,500.
Members may resign from StepStone Angels at any time; however, no member will be entitled to a
refund of the annual Membership Fee. Memberships are not transferable.

Individual members are permitted to engage companies that have presented to StepStone Angels and
do not reach the $100,000 minimum investment threshold or do not present at formal meetings;
however StepStone will neither promote nor manage such investments.


Participation in StepStone Angels requires the ability and willingness to make investment decisions and
to accept high risks and lack of liquidity. Each member must rely on his or her own examination of
investment opportunities and the terms of those investment transactions in making investment


StepStone Business Partners, LLC - Winter2008
                                                Appendix A

Accredited Investors

Under the Securities Act of 1933, a company that offers or sells its securities must register the securities
with the SEC or find an exemption from the registration requirements. The Act provides companies with
a number of exemptions. For some of the exemptions, such as rules 505 and 506 of Regulation D, a
company may sell its securities to what are known as "accredited investors."

The federal securities laws define the term accredited investor in Rule 501 of Regulation D as:

    1. a bank, insurance company, registered investment company, business development company,
       or small business investment company;

    2. an employee benefit plan, within the meaning of the Employee Retirement Income Security Act,
       if a bank, insurance company, or registered investment adviser makes the investment decisions,
       or if the plan has total assets in excess of $5 million;

    3. a charitable organization, corporation, or partnership with assets exceeding $5 million;

    4. a director, executive officer, or general partner of the company selling the securities;

    5. a business in which all the equity owners are accredited investors;

    6. a natural person who has individual net worth, or joint net worth with the person’s spouse, that
       exceeds $1 million at the time of the purchase;

    7. a natural person with income exceeding $200,000 in each of the two most recent years or joint
       income with a spouse exceeding $300,000 for those years and a reasonable expectation of the
       same income level in the current year; or

    8. a trust with assets in excess of $5 million, not formed to acquire the securities offered, whose
       purchases a sophisticated person makes.

StepStone Business Partners, LLC - Winter2008
StepStone Angels facilitates the introduction of entrepreneurs to potential investors through presentations and
other mechanisms. StepStone Angels consists of individual angel investors interested in financing privately held
companies or ventures typically in an early stage of development. Membership in StepStone Angels is a privilege,
which is subject to renewal, revocation, or termination for a member’s failure to conduct him or herself in a
manner consistent with StepStone Angels’ Membership Agreement and Code of Conduct below.


         Qualifying individuals are invited to consider becoming members of StepStone Angels. Membership is at
          the discretion of StepStone Angel’s Membership Committee and is subject to annual renewal, non-
          renewal, revocation, or termination by StepStone Angel’s Membership Committee.

         All new members (and renewing members) must complete this Membership Agreement and the
          Membership Survey.

         Applications and Surveys may then be forwarded by email or mail to StepStone Angels at the addresses
          noted herein.

         The Membership Committee will review all applications for membership and endeavor to provide
          applicants with a written response within thirty (30) days of completed application submission. (Your
          payment, whether by check or credit card, will be held for processing until after your membership has
          been approved.)

         StepStone Angels membership may be terminated or membership revoked at the discretion and
          determination of StepStone Angels Membership Committee, should it be determined that a StepStone
          Angels member has breached any term of StepStone Angels membership. A member will be notified in
          writing by the Membership Committee of the intent to terminate or revoke membership, and the on-
          notice member shall have thirty (30) days in which to submit a written response to the Membership
          Committee, should the member deem his/her actions or inactions do not warrant or qualify for
          termination or revocation of membership. The Membership Committee shall consider, in good faith, such
          on-notice member written response within sixty (60) days. The decision of the Membership Committee is


         I will conduct myself in a professional manner at all times.

         I will respect the privacy of other members and not provide their name to any third party without their

         I will keep membership information confidential.

StepStone Business Partners, LLC - Winter2008
         I understand and recognize that StepStone Angel’s meetings and communications are focused on
          investment pursuits and will not solicit another member for business.

         I will disclose to the group any relationship I have or may have with a presenting company, including any
          personal gain I may receive from the company.


StepStone Angels is not a venture fund, an investment bank, a broker dealer, investment clearing-house, or an
investment advisor, but rather a forum in which investors may be educated on aspects of investment and business,
as well as introduced to companies for possible investment. StepStone Angels is not registered with the Securities
Exchange Commission or any state securities commission. Each member of StepStone Angels is responsible for his
or her own investment decisions, and StepStone Angels is not recommending any particular company for
investment. All investments in entrepreneurial companies involve a high degree of risk, and investors should be
able to bear the risk of complete financial loss. The choice to use and manner of utilization of information and
knowledge gained through StepStone is each member’s individual and personal choice. No guidance shall be given,
nor shall any person affiliated with StepStone Angels (or StepStone Angels itself) be responsible for an individual
member’s use of the information, investment decision, or the results of any investment. StepStone Angels does
not conduct any investigation to verify the factual information submitted to potential investors by individual
entrepreneurs. Hence, StepStone Angels makes no representations or warranties regarding these companies.
Investors must conduct their own due diligence and negotiate the terms of any investment they elect to make.

Please forward with your application to:

StepStone Angels c/o StepStone Business Partners, LLC
351 W. 10th Street, Suite 311
Indianapolis, IN 46202


Read, understood, and agreed to by:

Submitting Applicant Member (Signature)

Printed Name

Please submit this membership agreement with annual membership dues of $ 2,500 to the address at the end of
this packet. Please make the check payable to StepStone Angels. Your check will not be cashed unless and until
your application for membership has been accepted.

Complete membership submission includes:
    Completed StepStone Angels membership agreement
    Completed StepStone Angels membership survey
    Review and agree StepStone Angels prospectus
    Annual Membership Dues

StepStone Business Partners, LLC - Winter2008
                               STEPSTONE ANGELS MEMBERSHIP SURVEY
StepStone Angels is keenly interested in providing members with maximum benefit, which is aligned with member
interests. One of the ways we have to better understand these interests is to conduct membership surveys and
carefully review the results for trends, such as:

    1.    Investment interests;
    2.    Need for expertise among membership; and
    3.    Membership skills which may be valuable to the group as well as portfolio companies.

Individual data will be treated confidentially and will not be shared internally with other members or externally;
only selected StepStone Business Partners Board members will be privy to individual responses. The survey results
may be used in aggregate to present StepStone Angels as an entity to venture capitalists, businesses, and the
media for the purpose of securing high-quality deal flow, membership, and public relations.


    1.    What is your membership status?                                 New               Renewing

    2.    Have you ever been an angel investor?                           No                Yes

               a.   If yes, how long?                                   ____ year(s)
               b.   If yes, how many companies
                    have you invested in as an angel?                   ____ (number)

    3.    In what industry(s) do you have professional experience? (check all that apply)

            Healthcare       Telecommunications       Real Estate        Manufacturing             Environment
            Biotechnology Business/Financial          Energy             E-Commerce                Industrial
            Software         Consumer Products        Agriculture        Logistics
          Other: _________________________________
    4.    What business skills/expertise do you have? (check all that apply)

           Senior Mgmt      Board Member            Operations                  Marketing          Sales
           R&D              Financial Services      Human Resources             Insurance          Legal
           Advertising      Accounting
    5.    Have you ever been a company founder or officer? (check all that apply)

            Founder                         CEO                   President                 CFO            COO
            CIO                             VP ___________________________        Other

StepStone Business Partners, LLC - Winter2008

    6.    As an angel investor, what is the typical stage a company is in at the time of your first investment? (give
          percent for each, totaling 100%)

          Startup/Seed _____%             Early Stage _____%         Expansion _____%
          Late Stage _____%               Mezzanine _____%           IPO _____%

    7.    As an angel investor, what is the typical relationship you have with portfolio companies? (check all that

            Board Member                    Advisor/mentor              Officer               Employee       Consultant
            Passive                         Other: ______________________________________

    8.    As an angel investor, what has been your typical investment range? (give percent for each, totaling

          Under $5K ___%                  $5K-$10K ___%              $10K-$25K ___%                $25K-$50K ___%
          $50K-$100K ___%                 $100K-$500K ___%           $500K-$1M ___%                More than $1M ___%

    9.    What is your preferred form of investment? (rank 1-4, with 1 highest preferred)

          Equity _____                    Debt _____                 Combination _____             Case by Case _____

    10. What is your general expectation on length of time until return on your investment?

            Less than 1 Year                1-3 Years                   3-5 Years                    More than 5 years

    12. In what industries have you invested? (check all that apply)

            Healthcare           Telecommunications            Real Estate        Manufacturing              Environment
            Biotechnology        Business/Financial            Energy             E-Commerce                 Industrial
            Software             Consumer Products             Agriculture        Logistics
          Other: _________________________________
    13. What has been your historical angel investment rate of return?

            Negative             0% - 10%                      10% - 30%          30% - 50%
            50% - 100%           100% - 200%                   More than 200%
     14. What do you enjoy about being a part of StepStone Angels or any other angel group? (rank all that apply
          with 1 being highest)

          Deal Flow ___        Education ___      Networking ___ Joint Due Diligence ___           Meeting companies ___

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          Shared Expertise ___            Admin Support ___           Professional support ___ Guest speakers ___
          Other ____________________________________________
    15. How would you rate your overall satisfaction with StepStone Angels?                   _____ 1 – 5 (1 highest)

    16. How might we improve StepStone Angels and your membership experience?





Name: ________________________________________________                         Date:__________________________

                                                Thank you for completing this survey.


    After completing this packet, please submit this form electronically via e-mail by selecting the Submit button
    on page one of this form.If you wish, you may also submit the form by mailing or faxing it to:
    StepStone Business Partners, LLC
    351 West 10 Street, Suite 311
    Indianapolis, IN 46202

    Phone: (317) 635-9070
    Fax: (317) 635-7422

StepStone Business Partners, LLC - Winter2008

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