Do Angels Investors Make Money?
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1. Do Angels Make Money? 2. Do Angels Make Money? 3. YES 4. Angel Data Shows 2.5x Returns Overall Source: Kauffman Foundation, NESTA (a UK-based entrepreneurship foundation), the University of Washington, and Willamette University Really, they do 5. Survey Says Angel investors internal rate of return (IRR) is between 18 and 38 percent 6. Any ONE investment is likely to lose money. 6 investments increases the chances of a return greater than 1X. But, there is a catch 7. Will You? 8. Probably NOT 9. Unless 10. Your Active Bring Something to the Table Build a Portfolio Differentiate 11. Kaufman studies have shown that active investors are 3x more likely to realize a return than passive investors. Being Active 12. When you add value What is active? 13. Domain expertise Hiring better talent Acquiring more customers Developing greater operational expertise Introductions to industry players or follow on investments Adding Value 14. Bring Something to the Table 15. Can you help this business scale faster & smarter? Why you? 16. How can you actually differentiate? Sell something else, of course. The Business Angel 17. Your expertise, Your portfolios network effect, Your history of success, or. Sell your personal brand 18. Focus on a specific sector and stage of investment Focus 19. Early stage startup versus a growth-stage business ready to scale. Challenges will be different. Market opportunities will be different. Expertise gaps will be different. Different Needs 20. Deliver relevant insights, ideas and advice. Identify opportunities within the niche. Create a team capable of delivering on those opportunities. Deliver 21. To develop a portfolio strategy Rinse & Repeat 22. Build a Portfolio 23. Do You Have the Money? Portfolio of 10 Deals Initial investment - 10 x 50,000 = 500,000 Dry powder 10 x 25,000 = 250,000 Investment Pool 750,000 24. Do You Have the Deal Flow? Angel Clubs Online AngelsList, Gust, Angels Den Personal Network 25. Do You Have Selection Intelligence? Do Your Homework - Each investment has to be done as though its your only one. 26. Term Sheet Basics Valuation considerations Securing the opportunity to invest further in their winners Protecting yourself from being diluted if a company begins to falter The connection between the term sheet and an investor's control over a company 27. Do You Have a Team? Legal Dont know what a drag along right is? Get Help Financial Tax Credits, Capital Gains Others Governance, Technical or Operations 28. Can You Make Introductions? Mentors, Vendors, Personnel Other Investors Can you help raise the next round? Introductions to their first customer or strategic partner Help find an exit 29. Your founders will Build better companies, Have more successful exits. If Yes, then 30. www.angelsbootcamp.org