Raising Angel Funding

Raising Angel Funding

SEEDCHANGEInvest In What’s NextTM

About Your Hosts

2

Kevin SmithFounder and CEO

Sirk RohChief Operating Officer

SEEDCHANGEInvest In What’s NextTM

What’s an angel?

• High net worth/Very high net worth

• Live in tech hubs, typically invest locally

• Well-educated

• Part-time investor

• Sees 50-250 startups/year

• May be member of an angel group

Well-off, either from tech/finance

What kind of companies do angels invest in?

• Companies in seed or early stage

• Typically tech, including clean tech, biotech, healthcare

• Looking for: Solve a problem, management team, IP, business model

How do entrepreneurs connect with angels?

• Full time, 12 hours/day, 4-6 months• Rely on your network• Must have persistence and outstanding

communications skills• Objectives

o Get introductions to 100-250 investorso Meet 50-100 investorso Follow up with 25-75 investorso Conduct diligence process with 25-50 investorso Get checks from 8-15 investors

Questions angels askProduct What’s your business about? Why will people use your

product?How do you make money?

Market How big is your market? Who’s your competition? Distribution?Have you talked to customers? Product-market fit?

Team How did the founders meet?Who is on (and not on) your team?

Risks What is the biggest problem you need to solve now?

Technology and IP

Who owns the IP (and how do you know)?

Funding Justification/Use of FundsMilestonesFinancial projectionsThink ahead to Series A

Questions angels don’t ask (out loud)

• Do the founders like each other?

• Do I trust you?• Can you sell?• Can you build a team?• Can we work together?• What are your weaknesses?• Why isn’t XYZ going to crush

you?

Non-rational criteria

Founders

Do I identify with you?

Industry

University

Experience

Product

Cool factor

Resolving personal pain

Market

Personal experience

Interest

Angel decision-makingtimeline

Contact

Meeting#2

Meeting #5

Meeting #6

Meeting#3

Meeting #1

Meeting#4

$

Decision-making process…

Elevatorpitch

Pitchdeck

Founderinfo

ProductMarketBusiness modelCompetition

Domain expertiseIntelligenceCommunication skillsPersistence IntegrityRelationship

CustomerMarket sizeCompetition

Prob/SolutionTractionProduct-Market fit

Product overview

Market

Product

Decision-making process

Tech Financials Deal Legal

Tech team Use of fundsMilestonesGrowth plan

AmountTermsInvestors

Regulatory threatFormationStock IP

Funding Pitch Guidelines

• Tell a story• Problem• Solution• Market size• Business model• Competition• IP• Team• 10-12 slides maximum• One key point/slide: Backup data in appendix• Don’t read it from slides

Valuations

What is the valuation of my startup?

• Based on traction

• Based on geographical comps

• Entrepreneur ask vs investor tell?

Q&A and Thank You!

14

Kevin Smith

415 Jackson Street

San Francisco, CA 94111

www.seedchange.com

[email protected]

650.703.3749

@kdsmith94010

Sirk Roh

www.earlygrowthfinancialservices.com

[email protected]

415.234.3437

@EarlyGrowthFS

SEEDCHANG

EInvest In What’s

NextTM