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Equity Investors

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					Business Angels


                      or
              Informal Investors


                  by Mr Ties van der Laan
                   Ties Corporate Finance
     10, rue des Alouettes, L-1121 Luxembourg-Cents
                        Luxembourg
          m +352 691 427 566, t/f +352 427 566
                e ties@ties.lu, i www.ties.lu
                            Where to look? - depends on where you are
                                                                                                                                                     BUY OUT / M&A
             = COMPANY'S LIFE CYCLE
             = FINANCE                                                                                                                                Growth, profit
             = FINANCIERS                                                                                                  EXPANSION
             = EXIT
                                                                                                                              Growth              MBO, MBI, IBO, LBO
M&A = Mergers & Acquisitions                                                                      EARLY STAGE                                      Merger, Acquisition
IPO = Initial Public Offering                                                                                                                        and Turnaround
MBO = Management Buy Out                                                                       Accelerated growth       Third, Fourth, …..         Loans, Mezzanine,
MBI = Management Buy In                                                     START-UP                                    Equity (expansion      Equity (later stage capital),
IBO = Investor Buy Out                                                                                                    capital), Loans                 Grants
LBO = Leveraged Buy Out                                                     Marketing             Second round
                       RESEARCH & DEVELOPMENT                                                         Equity
                                                                                               (early stage capital)
  Concept      Research      Project plan      Design      Prototype        First Round
                                             specification                     Equity                                   Management team,           Management team,
                                                                         (start-up capital)                            Corporate investors,       Venture capitalists,
                             Seed round                                                                                 Venture capitalists,      Mezzanine providers,
     Grants, Gifts, Goods, Services, Loans, Equity (seed capital)                               Management team,              Banks,                      Banks,
                                                                        Management team,       Corporate investors,            IPO.              Institutional investors,
                                                                         Business angels,       Venture capitalists.                                  Public sector.
        Public sector, Sponsors, Founder & friends & family,           Corporate investors,
                               Banks,                                   Venture capitalists.
      Business angels, Corporate investors, Venture capitalists.


                           License or sale                                 (Trade) sale            (Trade) sale         (Trade) sale, IPO,         (Trade) sale, IPO,
                                                                                                                        secondary buy out          secondary buy out
Business angels




Characteristics
Who are they?
What do they seek?
How do they operate?
BA’s: characteristics

 Successful business(wo)men
 “Have been there, done that”
 Invest their own money
 Funds: up to € 1m, few larger
 Deals: from € 15-200k, typically € 75k
 Aged between 50-70 years, few younger
 Driven by “giving something back”
 Other agendas - fun, involvement
 Profit less significant
Who are the BAs?

 Executive angel
   Active entrepreneurs, executives or consultants
   Investments between € 50k - € 100k
   Extra turnover, networking, hobby
 Job seeking angel
   Redundant executives
   Work in the € 30k - € 70k area
   Busy, active
 Retired angel
   Workaholics
   Smaller amounts (€ 15k - € 50k)
   Busy, active
What do BAs seek?

Small companies
   Mostly active in markets they know
   Growth in growing, large, empty niche markets
   In 7-10 years potential turnover >100m
   Also invest in seed phase
   Nearby
Return
   Profit through tradesale or IPO
   Dividend, interest and fees
Likeable persons
   In business (entrepreneur) and private (talk)
   Mutual trust
How do BAs operate?

Intake
   Via friends, family or business (angel) networks
   Low due diligence
The deal
   Straightforward structure
   Veto rights, minority protection, anti-dilution
   Time frame from several weeks to one month
After the deal
   Close involvement: 1-3 days/week
   Hands on unless going badly
   Business devils
From start to finish (I)

 The more steps you complete the easier it becomes
   to raise finance:

 1.   Finalise your product (grants)
 2.   Find entrepreneur (yourself?)
 3.   Found company (own money, house, FFF)
 4.   Find business partners (sponsors)
 5.   Find customers and sell (auto-finance)
 6.   (Accelerated) growth (raise finance)

                     continued on next slide
From start to finish (II)

                    continued from the previous slide


 7. Raising equity finance:
     1. Prepare business plan/presentation/pitch
        With help of dedicated professionals?
     2. Research financial world
        Business Angel Networks (BANs, www.eban.org)
        EVCA/local VCAs (www.evca.com)
        Networking
     3. Approach chosen potential investors
        With help of dedicated professionals?
 8. Later stage: MBO/MBI/Turnaround
 9. Raising equity finance: see 7.
 10. Sell: tradesale or IPO
                            Where to look? - depends on where you are
                                                                                                                                                     BUY OUT / M&A
             = COMPANY'S LIFE CYCLE
             = FINANCE                                                                                                                                Growth, profit
             = FINANCIERS                                                                                                  EXPANSION
             = EXIT
                                                                                                                              Growth              MBO, MBI, IBO, LBO
M&A = Mergers & Acquisitions                                                                      EARLY STAGE                                      Merger, Acquisition
IPO = Initial Public Offering                                                                                                                        and Turnaround
MBO = Management Buy Out                                                                       Accelerated growth       Third, Fourth, …..         Loans, Mezzanine,
MBI = Management Buy In                                                     START-UP                                    Equity (expansion      Equity (later stage capital),
IBO = Investor Buy Out                                                                                                    capital), Loans                 Grants
LBO = Leveraged Buy Out                                                     Marketing             Second round
                       RESEARCH & DEVELOPMENT                                                         Equity
                                                                                               (early stage capital)
  Concept      Research      Project plan      Design      Prototype        First Round
                                             specification                     Equity                                   Management team,           Management team,
                                                                         (start-up capital)                            Corporate investors,       Venture capitalists,
                             Seed round                                                                                 Venture capitalists,      Mezzanine providers,
     Grants, Gifts, Goods, Services, Loans, Equity (seed capital)                               Management team,              Banks,                      Banks,
                                                                        Management team,       Corporate investors,            IPO.              Institutional investors,
                                                                         Business angels,       Venture capitalists.                                  Public sector.
        Public sector, Sponsors, Founder & friends & family,           Corporate investors,
                               Banks,                                   Venture capitalists.
      Business angels, Corporate investors, Venture capitalists.


                           License or sale                                 (Trade) sale            (Trade) sale         (Trade) sale, IPO,         (Trade) sale, IPO,
                                                                                                                        secondary buy out          secondary buy out
Ties Corporate Finance


                  Business coach
                 in raising finance
           for the start-up or expansion
                   of businesses


To create a winning business plan
To approach investors professionally
To negotiate with investors successfully
Contact details


           Ties Corporate Finance
              Ties van der Laan
            10, rue des Alouettes
         L-1121 Luxembourg-Cents
        Mobile: (+352) 691 427 566
            Fax: (+352) 427 566
             Email: ties@ties.lu
            Internet: www.ties.lu

				
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posted:2/15/2010
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