Pre-seed Stage Seed/Start- up Stage FUNDING GAP Early Stage Later Stages Founders’ Friends & Family Angel Investors Very few angel deals done above $1 million Very few VC deals done below $4 million Venture Capitalists $0 $250K $1.5 million $4 million $10 million & up
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Pre-seed Stage
Seed/Start-up Stage
FUNDING GAP
Early Stage
Later Stages
Founders’ Friends &
Family
AngelInvestors
Very few angel deals done above $1
million
Very few VC deals done below $4 million
Venture Capitalists
$0 $250K $1.5 million $4 million $10 million & up
Financing Life Cycle
DiscoveryProof-ofConcept
ProductDesign
ProductDevelopment
Manufacturing/Delivery
Idea Pre-seedFunding
Seed Funding
Expansion/MezzanineOperating Cap.
Friends and Family
Angels
Seed Funds
Venture FundsFounder
Institutional Equity
Loans / BondsAngel Groups
Start-up Funding
SBIRPhase I Phase II
New Company Formation (USA)
Source of Equity Funds – Typical Year
0 100,000 200,000 300,000 400,000 500,000
500 Classic VCs
1000-2000 Seed Funds
>50,000 Angels
>200,000 Friends & Family
500,000 Startup Companies
Source: Business Dynamics Statistics Briefing: Jobs Created from Business Startups in the United States. Kauffman Foundation, January 2009.
HAIL TO THE JOB CREATORS
Who are Angel Investors?• Often successful, exited entrepreneurs or retired business
persons – Active investors– Invest both time and money in companies
• Accredited investors - SEC definition (US & a few others)• Invest their own money (not money managers)• Generally invest in local companies• Invest at least $20K in businesses not run by family
Angels Fund Majority of Startups in US
Sources: Center for Venture Research/ UNH; NVCA 2013 Yearbook; PwC MoneyTree