Ten Organizational Design Models to align structure and operations to busines...
What Angel Investors Look for in Fundable Companies, NZ and AUS
1. What Angel Investors LookWhat!Angel!Investors!Look!
For in Fundable CompaniesFor!in!Fundable!Companies
Bill!Payne
BNZ!University!of!Auckland!Business!School!
Entrepreneur!in!Residence
6. F i d d F il IFriends!and!Family!Investors
P d fi i• Pre"seed!financing
– To!develop!product
– To!find!customers
• Unsophisticated• Unsophisticated
– Equity?!!Debt?!!Gift?
i i h b f i– Limit!the!number!of!investors
www.billpayne.com
7. Wh A Th A l ?Who!Are!These!Angels?
! Wealthy!individuals!– “accredited!investors”y
! “Been!there!and!done!that”!entrepreneurs
! “Mad!money”
! Generally!$25K"$250K!per!deal!per!angel
! Several!angel!investments
! Range!of!involvements
! Lead!investor!– Chairman!of!the!Board
I t / d i! Investor/advisor
! Passive!investor
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8. V t C it li tVenture!Capitalists
! General!partners
! Salaried!managers
! Minimal!investment,!huge!upside
! Limited!partners
! Corporations,!pension!funds,!
wealthy!individuals
! Totally!passive!involvement
! 800!venture!capital!funds!#
! Size: $5 million to >$10 billionSize:!!$5!million!to!>$10!billion
www.billpayne.com
9. N di l A t (NDA )Nondisclosure!Agreements!(NDAs)
• Most angels and VCs will not sign• Most!angels!and!VCs!will!not!sign
– See!too!many!deals
I t it i k t ti i b i– Integrity!is!key!to!continuing!business
– Not!motivated!to!steal!technology
• May!sign!NDA…
– During!due!diligence,!not!earlier
– Covering!a!very!narrow!set!of!issues
• Business Plan " no proprietary informationBusiness!Plan! no!proprietary!information
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11. A l R ti S tAngel!Rating!System
0"30%Management team 0"30%
0"25%
Management!team
Size!of!opportunity
0"15%
0"10%
Product!&!technology
Sales!channels
0"10%
0 5%
Competitive!advantage
Si f thi d 0!" 5%
0!" 5%
Size!of!this!round
Need!for!more!funding
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12. F d bl M TFundable!Management!Teams
• CEO
– CEO!experience
– Coachable (very important)Coachable!(very!important)
– Vertical!experience
Leadership– Leadership
• Team
– Balance!and!complete
– Experience working togetherExperience!working!together
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13. Si f th O t itSize!!of!the!Opportunity
l bl• Scalable!
– $20!million!(min.)!in!revenues!in!5!years
$– (VCs!look!for!>$100!million)
• High!gross!marginsg g g
• Large!niche!market
U f i i i d• Unfair!competitive!advantage
• Ready!for!customers
www.billpayne.com
14. C titi Ad t (IP)Competitive!Advantage!(IP)
• Patents
– Important, but difficult to defendImportant,!but!difficult!to!defend
• Trademarks/copyrights
T d S t• Trade!Secrets
• Very!important!at!exit
15. D l Fl St ti tiDeal!Flow!Statistics
• Prescreening
• Screening
! 1!in!4!to!Screening
! 1 in 3 to DDScreening
• Due!Diligence
! 1!in!3!to!DD
! 1!in!3!to!Inv.!Meeting
• Investment ! 1!in!2!raise!money
!• OVERALL ! 1!in!72!who!apply!receive!
investment
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