1. Angel Investing
Presented by Roger London
American Security Challenge

2. Background
$1B
Serial Entrepreneur #6?
Dept of Defense and Intelligence Community Tech Scout
Dingman Angels, Baltimore Angels
Startup America/NYSE, Wal-Mart, GE, Coca-Cola
NOKIA Venture Capital
Techstars mentor and partner

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5. Fundamentals?

6. 0
0.1
0.2
0.3
0.4
0.5
Ignore
Customers
Poor Product
Not Right
Team No Market
Need
14% 17%
23%
42%
Startup Failure Not Right Team
Poor Product
No Market Need
Ignore Customers
Top 4 Reasons Startups Fail

7. Red Flags
1. Market share based on % of total market
2. FF&F terms not angel friendly
3. Use of Proceeds pays salaries or debt
4. Send unsolicited plans
5. No competition
6. NDAs
7. Polishing the cannonball
8. Bury the headline
9. Relatives/friends on team
10. Muddy IP

8. Soooo, what should you do?
1. Clearly defined benefits and differentiation in scalable business
2. Get customers pilots/traction/involvement early*
3. Show exit possible
4. How are you going to make money!
5. Traunche milestones
6. Team examples of success
7. Valuation
8. Clear, concise and compelling- 6th grader *
9. Forget crowdfunding
10. Profitable, repeatable, sustainable, scalable

9. Startups Hurdles Race Theorem
1. Distance: How long is the race…100 meters or mile? Is start to exit in
5 years or 15?
2. Number of Hurdles: is this a 3 hurdle race or 10 hurdle race where
hurdles include factors like raising capital, finding talent, raising
capital, creating demand in new market, manufacturing, raising
capital, distribution, etc.
3. Hurdle height: are these hurdles easily crossed? Need 100 customers
or 1M to break even?
4. Purse: playing for pile of pennies or pot of gold?

10. Bonus: from Driven Forward
1. Dumb money
2. Kiss of death advisor
3. Misspent effort
4. King of the dung hill
5. Build to buzz ratio
6. Seem uncoachable

11. Bonus: from Jitha Mithra
• It’s one which sounds plausible, but is actually bad
Startup Ideas
Plausible
Startup Ideas
Good
Startup Ideas
How to save yourself from a bad startup idea
that looks good

12. Bonus: from Jitha Mithra
Narrow and deep vs broad and shallow
• You’ve got to create a product that at least a few people NEED, not one
that a large number of people WANT.
• A “painkiller” vs “vitamin”
Instead of focusing on cool things people could use,
try and solve a real problem

13. Bonus: from Jitha Mithra
If the problem you’re solving is not one of your customer’s
top 3 problems, its not important….its a nice to have
Version 1.a Solving a problem people don’t
know they have
Version 1.b The product solves everyone's
problems…..you end up solving a problem for
no one

14. Bonus: from Jitha Mithra
Templatized business models
• Uber for lawn service
Incremental business models
• Uber with Wifi
Cloning an existing player but in adjacent market
• Uber for water taxis

15. Bonus: from Jitha Mithra
No Competition
• If no competition, maybe the market is unattractive?
• Lack of thorough research because beautiful baby

16. Bonus: from Jitha Mithra
MVP requirement
• Build and test an MVP version with user/customer interaction

17. Roger London, President
S3 Innovations
AmericanSecurityChallenge.com | TechMATCHs3.com
Email: Roger@AmericanSecurityChallenge.com
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