Successful Investor

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					Successful Early Stage Investing Networks:
   Angels, Entrepreneurs and
          Enterprises
                      Dan Loague
    National Association of Seed and Venture Funds
                  www.nasvf.org
Successful Early Stage Investing Networks:
Angels, Entrepreneurs and Enterprises


     Outline:
        About NASVF
        NASVF’s Seed Investing Seminars
            For investors and for entrepreneurs
            Market
            Natural attractions
            Scope
            Examples
            Results
Successful Early Stage Investing Networks:
Angels, Entrepreneurs and Enterprises

  Outline (continued):
        Deal Flow Sources- Angels and Founders, Etc.
        Deal Flow Sources- “The Network”
              Community, local, state and regional
              Public - universities, state and local
              Private and Corporate
              Professional

        Network Building Tools
        Outcomes
Successful Early Stage Investing Networks:
Angels, Entrepreneurs and Enterprises



                                       NASVF
        National Association of Seed and Venture Funds
      a network of private, public and nonprofit organizations
               committed to building their local economies
            by investing and facilitating investment in local
                             entrepreneurs.
Successful Early Stage Investing Networks:
Angels, Entrepreneurs and Enterprises




     NASVF’s Seed Investing Seminars
             provide basic information on the process of seed investing
             help create and expand local early stage investing networks
             focus on enterprise creation and growth
             stimulate the local seed investing market
             effective tools for communities to harness key local resources.
Successful Early Stage Investing Networks:
Angels, Entrepreneurs and Enterprises

  Swing for the Fences -
  Seed Investing for Entrepreneurs
Successful Early Stage Investing Networks:
Angels, Entrepreneurs and Enterprises


     The Market:

                                    Equity Capital for Entrepreneurs
                                             Seed/ Start-Up                 Early                           Later
                                     Stage

                                             FDRS     FFF               Angels                         Venture Funds
                                    Source
                                        $25K     $100K             $500K                $2,000K
                                   Demand

                                    Supply              ---------------------------------

                                                                 Funding Gap




                                               Center for Venture Researc h - University of New Hampshire
Successful Early Stage Investing Networks:
Angels, Entrepreneurs and Enterprises

Natural Attractions:
         Entrepreneur*                                      Early stage investor*
              Terrifically Smart                                Investing Expertise
              High Integrity                                    Industry Experience
              Cash Flow Fluent                                  Risk Tolerance
              Proprietary Advantage                             Patient Money
              Leading Edge Technology                           Additional Investment
              Market Dominance                                  Congruent Exit Strategy
              “5 in 5” ROI                                      Active Participation
              Clear Exit Strategy                               Cheerleader Potential
             *From “What Angels Want,” Jeffrey L. Seglin.       *Adapted from participant workshop at the
                                                                    1997 NASVF Annual Conference, Santa
                  Inc magazine, Nov., 1997, p. 43.                  Fe, NM.
Successful Early Stage Investing Networks:
Angels, Entrepreneurs and Enterprises


     National Scope:
        80+ communities and 39 states

        3,500+ persons trained, including -
                seed investors (angels)
                investment professionals
                entrepreneurs with technology based enterprises
                economic developers
                community leaders
Successful Early Stage Investing Networks:
Angels, Entrepreneurs and Enterprises


        Some Example Communities:
               Fairfield IA                    Alexandria MN
               Las Cruces NM                   Pasadena CA
               Spokane WA                      Portland ME
               Charleston SC                   Huntsville AL
               Jackson MS                      Columbus OH
Successful Early Stage Investing Networks:
Angels, Entrepreneurs and Enterprises


        Results:
           increased deal flow
           expanded sources of seed capital
           expanded enterprise development
           more active local seed investing market
           expanded investment in tech-based deals
Successful Early Stage Investing Networks:
Angels, Entrepreneurs and Enterprises


        Deal Flow Sources - Angels
          About 400,000 angels invest about $30 billion to $40 billion annually in
            over 50,000 ventures - angels are the "invisible" portion of the
            venture capital investment market.
           Undercover - vast informal market, by far the largest and oldest.

           Venture Capital clubs/groups
           Angel alliances
           Networks
           Electronic networks
Successful Early Stage Investing Networks:
Angels, Entrepreneurs and Enterprises


        Deal Flow Sources - Founders, etc.
           Founders - entrepreneurs who bootstrap their enterprises with
             personal resources and sweat equity
           FFF (Friends, Family and Fools; also referred to as "Uncle Harry or
            Aunt Harriet") - investors in loosely structured seed/start-up deals
Successful Early Stage Investing Networks:
Angels, Entrepreneurs and Enterprises


        Deal Flow Sources - “The Network”
           Consultants skilled in due diligence
           Local financial organizations with regional and national seed and
            venture capital relationships
           Local and regional private seed fund managers
           Local entrepreneurial associations
           Local entrepreneurs who have “cashed out” of a successful
            enterprise and seeking new opportunities (especially those
            entrepreneurs with successful technology-based companies)
           Local entrepreneurs who have successfully raised capital from
            seed investors and who understand the seed investing process
Successful Early Stage Investing Networks:
Angels, Entrepreneurs and Enterprises


        Deal Flow Sources - “The Network” (continued)
           Regional financial organizations that promote local economic
             development
           Technology associations that help develop specialized “clusters” of
            companies
           Local financial organizations with regional and national seed and
            venture capital relationships
           Venture Capital companies that work with local private investors
             (first and later rounds)
Successful Early Stage Investing Networks:
Angels, Entrepreneurs and Enterprises


        Deal Flow Sources - “The Network” (continued)
           Corporate research and development directors with IP available for

             investment
           Corporate new product investment managers
           Corporate seed and venture funds
           Local/Regional private and nonprofit foundations with a community
            development mission
           Local/Regional investment forum organizers
Successful Early Stage Investing Networks:
Angels, Entrepreneurs and Enterprises


        Deal Flow Sources - “The Network” (continued)
           Attorneys experienced in:
                  seed deals and expert in term sheets
                  intellectual property (IP) law and investment

           Private investors
                  High profile “super angels”
                  Individual local investors part of community leadership
                  Local informal angel investment clubs skilled in assessing and
                   “scrubbing” potential investments
                  Local angel organizations with a legal structure, also skilled in
                   assessing and “scrubbing” potential investments
Successful Early Stage Investing Networks:
Angels, Entrepreneurs and Enterprises


        Deal Flow Sources - “The Network” (continued)
           Economic developers skilled in technology commercialization
           University IP and technology managers with IP available for
            investment
           University seed and venture funds
           Recipients of SBIR and other federal technology business
            development grants
           Federal facility intellectual property and technology managers
Successful Early Stage Investing Networks:
Angels, Entrepreneurs and Enterprises


        Deal Flow Sources - “The Network” (continued)
           SBA Small Business Development Center professionals
             experienced in successful development of technology based
             companies
           Business incubators assisting local start up companies
           Chamber of commerce programs assisting in development of new
            companies
Successful Early Stage Investing Networks:
Angels, Entrepreneurs and Enterprises


        Deal Flow Sources - “The Network” (continued)
           State sponsored seed and venture funds
           State sponsored technology commercialization programs
           State departments of economic development/commerce with
            funded technology development programs
           State and local finance authorities that have relationships with
            regional and national seed and venture capital companies
           State and federal officials helping increase the availability of
            venture capital and to capitalize on public funded research by
            taking technologies into the commercial marketplace.
Successful Early Stage Investing Networks:
Angels, Entrepreneurs and Enterprises


        Network Building Tools:
           Seed Investing network-building interactive workshops
             Engaged regional and community civic leadership
             Initiatives to raise and expand capital for early-stage enterprises
             Formation of angel clubs and formal seed investing organizations
             Technology based enterprise associations
Successful Early Stage Investing Networks:
Angels, Entrepreneurs and Enterprises

        Outcomes:
          Harnessing local resources to create and grow ENTERPRISES
            produces:
          Increased number of great deals in which to invest
          Increased number of investors interested in HOME GROWN companies
          Expanded early stage capital to fill the funding gap for enterprises with high
           growth potential
          Expanded networks of investors and entrepreneurs with links to regional
           and national venture capital resources
          A potential for creating cashed-out entrepreneurs to sustain and strengthen
           the local economy
Successful Early Stage Investing Networks:
Angels, Entrepreneurs and Enterprises



               Dan Loague
               National Association of Seed and Venture Capital
               301 N.S. 63rd Street Suite 500
               Oklahoma City, OK 73116
               Ph: 405-824-5549
               Fx: 800-420-8329
               Web: http://www.nasvf.org

               Em: dloague@nasvf.org

				
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