Advice from an angel

Wendy Ryan, Managing Director

Golden Seeds
 What is an Angel Investor?

 Individual who invests personal funds into an early-stage

business venture

 “Accredited investors” per the Securities Act of 1933

 Angel Capital Association is our trade organization

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When Do Angels Invest?
Stage of Company Players Involved Type of Security
Common Stock
Membership Interests
Seed Round Friends and Family
(LLC)
<$250k Solo Angels
Convertible Note
Gift, Grant or Loan
Series A or B Angel Groups Preferred Equity
$250K-$10M VC Convertible Note
VC Preferred Equity
Series C or D
Private Equity Mezzanine Financing
$10M-$100M
Hedge Funds Venture Debt

Public Market Investment Banks “Publicly Listed” Stock

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 Angels vs. Venture Capital Funds
Angels are active investors:

 Invest earlier = take on more risk

 Former entrepreneurs and/or strong supporters of entrepreneurship
 Invest in more deals than VC’s, but in smaller amounts
 Often join angel groups for the benefit of deal flow, due diligence collaboration and deal
influence

Venture Capital Funds invest on behalf of passive investors Limited

Partners (LPs):

 Invest later and in larger amounts

 Decisions are made solely by the professionals - General Partners (GP’s) of the fund.
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What Angels Want

 Capable and coachable management team

 Scalable business model with minimal cap ex
requirements
 Multiple streams of revenue (preferably recurring)
 Addressable market of >$500M
 Clear exit strategy within 3 - 7 years
 Opportunities for me to add value through my network

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 Are You Ready?

 Product is in beta stage of development created with

input from clients or potential client
 Company has “proof of concept” revenue
(exception: biotech/pharma)
 Valuation at first funding <$5M (pre-money)
 Seeking first-round $250K-$2M
 Consumer product companies with revenue run rate
>$1M and gross margins >40%

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 Your Pitch Deck (10 Slides)

1. What problem are you solving?

2. What is your solution?
3. Who has this problem?
4. Who are your competitors and why is your solution better?
5. How are you going to attract customers and how much will it cost?
6. What are your sources of revenue and expenses?
7. Who is on your team and why have you chosen them?
8. How much money do you need and why?
9. How and when will I receive a return on my investment?
10. Summarize why I should invest.

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 Sample Funding Process/Timeline

 Week 1 Application
 Weeks 2 – 4 Screening
 Weeks 4 – 5 Deep Dive
 Weeks 4 – 8 Due Diligence
 Weeks 8 - 12 Funding

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 Tips

1. Hire people with a track record of execution

2. Assemble experts/champions (Board of Advisors)
3. Always have your 30-second and 2-minute elevator
pitches ready
4. Research which angel investor groups are active in
your sector and mission aligned
5. Leverage impact groups if you qualify
6. Meet angels informally before you pitch us

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 About Golden Seeds

15 years
Boston
300 investors
New York
Silicon Valley
20+ States, 7 Chapters

Evaluated over 3000

SoCal companies
Texas
Invested $135 million
in 200 companies

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