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