Aspiring entrepreneurs in Northern Kentucky will have the opportunity to make their dreams of starting a business come true.

They will participate in a business pitch competition at Covington’s UpTech on Thursday. Similar to the hit TV show Shark Tank, participants will have minutes to present their business idea to a group of potential angel investors, individuals who provide capital for startup companies. Winners will receive cash prizes and the opportunity to present their plans to the entire Kentucky Angel Investors Network (Kentucky Angels) in Frankfort.

“This is a great opportunity for entrepreneurs to network with potential investors,” said Mandy Lambert, commissioner of business development at the Kentucky Cabinet for Economic Development. “Kentucky has a strong entrepreneurial spirit, and we want to expose more people to investment opportunities throughout the state.”

UpTech is located at 112 West Pike Street and the competition goes from 5 p.m.-6:30 p.m.

The event is one of eight statewide pitch competitions hosted by the Cabinet, the Kentucky Innovation Network and Kentucky Angels. Competitions have already taken place in Louisville, Murray, Elizabethtown, Pikeville, Richmond and Ashland with an additional event scheduled for later this year in Lexington.

“We welcome everyone that has an interest to learn more about our new Kentucky Angel Network and to see some of the up-and-coming early stage companies that will soon be pitching to angel investors,” said Casey Barach, director of the Kentucky Innovation Network Office in Covington. “Angel investing is a large part of our efforts to build the entrepreneur ecosystem in Northern Kentucky.”

Winners of the previous competitions are singing the praises of the events. “This [the competition] isn’t a publicity stunt, like others we’ve been to in other states” said Lula Luu, owner of Fin Gourmet in Paducah and winner of the pitch competition in Murray. “Kentucky cares about promoting entrepreneurship. All this was very impressive because Kentucky is not just talking about supporting small startups, they’re doing it.”

Register to attend the competition here.

Last year, the Cabinet successfully launched the Kentucky Angels Network. Kentucky Angels brings new ventures and accredited investors together via monthly online meetings, providing investors access to form deals and partnerships with entrepreneurs statewide. Membership is open to those accredited investors in and outside the state who are passionate about investing in Kentucky companies. To learn more about Kentucky Angels, visit www.kyangels.net.

Kentucky Jumps 45 Places in Entrepreneur Rankings

After being near the bottom a year ago, Kentucky’s entrepreneurial climate is now one of the best in the nation.

Governor Steve Beshear announced the annual State Entrepreneurship Index (SEI) ranked Kentucky fourth in the country for its ability to create businesses. The Commonwealth climbed 45 places from its ranking of 49th last year.

“Small businesses are the backbone of our economy,” said Gov. Beshear. “Over the past several years, this administration has focused on developing innovative programs and offering dynamic services to help these growing companies every step of the way. Even though this is a significant jump, I’m not surprised we’re producing great results. Kentucky is a tremendous place to grow a business.”

The SEI, first published in 2008, combines five factors to formulate the overall state rankings: establishment growth, establishment growth per capita, business formation rates, patents per 1,000 people and income levels for non-farm proprietors. In comparing these factors state-by-state and calculating their deviation from the median, the SEI ultimately reflects states’ entrepreneurial environment.

The Commonwealth continues to make entrepreneurship a priority. To assist Kentucky’s small businesses, the Kentucky Cabinet for Economic Development created the Office of Entrepreneurship last year to enhance the state’s existing efforts to help businesses at every step of the growth cycle. The goals of the Office of Entrepreneurship are to develop an entrepreneurial climate in Kentucky, provide guidance and support to startups and assist existing small businesses with growth opportunities.

The Office of Entrepreneurship also oversees the Kentucky Innovation Network. Consisting of 13 offices throughout the state, the Kentucky Innovation Network offers extensive resources for small and new businesses, as well as innovative and high-tech companies by offering a lifecycle of services. Assistance can range from funding initiatives, marketing and sales assistance, small business advocacy and resource referrals, along with a variety of financial and incentive programs to encourage investment and job growth. All services are provided free of charge.

“Last year, the Office of Entrepreneurship supported more than 2,000 small businesses, and that number is growing,” said Mandy Lambert, commissioner of business development in the Kentucky Cabinet for Economic Development. “We are seeing more and more startup companies getting off the ground and small businesses growing. As a result, more Kentuckians are starting to realize that they have the opportunity to become entrepreneurs.”

The SEI ranking is the latest in a series of accolades for Kentucky’s entrepreneurial climate. Thumbtack.com, in conjunction with the Kauffman Foundation, gave the Commonwealth an “A” rating in its annual Small Business Friendliness Survey. The Kauffman Foundation Index also places Kentucky fifth in the nation for entrepreneurial activity over the past two years.

-Staff report

Photo: UpTech sign (provided)

Article source: http://rcnky.com/articles/2014/08/26/entrepreneurs-make-pitches-covington-state-climbs-rankings

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We all know that women are vastly underrepresented in the tech industry.

We’ve seen some encouraging signs lately that this is changing, with more women enrolling in a prominent computer science university, a high-level VC saying he’s backing more women startups, and lists of women engineers having fabulous careers.

But here’s a sad stat that’s makes all those signs look like peanuts.

In 2013, money for startups was overwhelmingly going to male founders. LinkedIn recently analyzed 1,200 technology entrepreneurs who raised venture capital in 2013.

86.5% were men. 13.5% were women.

This is sad for a bunch of reasons. First, it shows that women are even more shamefully under-represented as startup leaders than they are in the big successful tech companies like LinkedIn, Facebook and Google.

Many big tech companies released diversity numbers this summer that showed between a quarter and a third of their employees are women. That’s still kind of sad, given that women make up half the population and the tech industry makes up one of the fastest-growing, highest paying job fields around.

But 13% is far less than that.

It’s all part of a harsh cycle. Fewer female-founded startups means fewer women who have big exists. That means fewer women doing multiple startups, or angel investing or becoming VCs and just plain being role models.

While the tech industry is loaded with fair-minded men, when women are a rarity in the workplace it’s acts like a petri dish for sexist behavior.

That makes it harder, and discouraging, for the few women who are working alongside them. And that leads to women getting fed up and leaving the industry, according to a recent study from University of Wisconsin, Milwaukee. 

That study looked into why out of 5,300 women who earned engineering degrees, 38% of them had left the field and found that old-boys-club type of culture had driven them away.

More From Business Insider

Article source: http://finance.yahoo.com/news/look-much-vc-money-being-203356899.html

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On Wednesday September 24, various angel networks that have emerged across Africa over the past years will converge in Lagos, Nigeria.

Kicking off innovation event DEMO Africa 2014, venture capital community VC4Africa presents a special Investor Summit – “the Future of Angel Investing in Africa”, focused on investors in African startups and early stage companies.

The event will be the first time angel investor networks like Cairo Angels, Lagos Angels Network, Ghana Angel Investors Network, Africa Angels Network, Angel Africa List and others come together to meet, exchange best practices, share lessons learned and set the road map for the future. Experts from organizations such as infoDev, the WorldBank, African Development Bank, the European Business Angels Networks (EBAN), VC4Africa’s Investor Network and others are also invited to join the conversation.

“For angel investors by angel investors”

The Investor Summit will focus on knowledge exchange between the continent’s various angel investors and angel investor networks and focus on the roadmap of the future of angel investing in Africa. The program will consist of speakers, breakout sessions and fireside chats. Investors will be both local and international and will consist of angel investors, impact investors, venture capital funds, corporates (corporate venture capital); all focused on early stage SME investing. Keynote speakers will be announced shortly.

The day will conclude with an exclusive investor-only cocktail on the evening of September 24 at the Oriental Hotel in Lagos. This will kick-off DEMO Africa 2014, the annual event where innovative African entrepreneurs come to launch their products and announce to Africa and the world what they have developed, on September 25th and 26th. All events are taking place at the Oriental Hotel Lagos, Nigeria.

“Help shape the future of angel investing in Africa”

VC4Africa offers a special package for investors who want to attend the Investor Summit and the whole DEMO Africa 2014 event in Lagos, Nigeria. The investor package costs USD 650 and includes VIP tickets to the Investor Summit and investor only cocktail (September 24th) and the 2 day DEMO Africa event, including free access to a deal room (September 25th and 26th), and a full year Pro account subscription on venture capital platform VC4Africa. Furthermore it will give access to outstanding network opportunities and VIP services during the DEMO Africa event.

Article source: http://allafrica.com/stories/201408250445.html

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SAN FRANCISCO, CA–(Marketwired – Aug 7, 2014) –  Keiretsu Forum, the world’s largest private equity angel investment network, announces its 19th bi-annual Northern California Angel Capital Expo on Thursday, November 20th, 2014 from 7:30 a.m. to 5:00 p.m. at Microsoft, 1065 La Avenida Street in Mountain View, California.

Angel Capital Expo is the premier gathering of angel investors and entrepreneurs seeking funding capital to grow their businesses. On November 20th more than 300 of the Bay Area’s most active and respected angel investors will attend the Expo. View video from the November 21st, 2013 Angel Capital Expo.

“Our Angel Capital Expo provides a unique opportunity for collective collaboration in the world of angel investing,” said Randy Williams, Founder and CEO of Keiretsu Forum. “We are proud to play a seminal role in the growth of start-up businesses and job creation at a local, national and international level.”

Angel Capital Expo will feature 20 high-quality, diverse investment opportunities in technology, healthcare/life sciences, consumer products, real estate and funds. Companies that apply to Keiretsu Forum are typically in their A or B rounds having already secured initial funding of $500k to $1.5 million from founders, friends, family, and individual angels. All presenters will be pre-screened by a select committee of Keiretsu Forum members. Presentation coaching will be provided to companies selected to present. Each entrepreneur will make an on-stage presentation and will be available for additional discussion and due diligence at their exhibitor booth throughout the day. Following the presentations, the attendees will vote and award the top three presenting companies the “Most Valued Company” award.

Apply to Present
Companies interested in presenting at the November 20th, 2014 Angel Capital Expo should complete the on-line application and contact Jenny Pater, Associate for Entrepreneur Relations, at jpater@keiretsuforum.com or call +1 (415) 573-0752.

Register to Attend
Hosted by Keiretsu Forum, the Angel Capital Expo is the premier gathering of the angel capital community. Invitation to attend is extended only to accredited investors. Register here. For more information, contact Carla Silva, Associate for Member Relations, at carla@keiretsuforum.com or call +1 (415) 573-0753.

About Keiretsu Forum
Keiretsu Forum was founded in 2000 by Randy Williams in the San Francisco Bay Area. With 33 chapters and over 1,100 accredited investor members, Keiretsu Forum is the world’s largest invite-only angel investor network. Keiretsu Forum members provide early stage capital in the range of $250k – 2 million in high quality, diverse investment opportunities and collaborate in the due-diligence, but make their own individual investment decisions. Through the Keiretsu Forum, more than $400 million of capital has been invested into technology, consumer products, Internet, healthcare, life sciences and real estate companies. For more information, visit www.keiretsuforum.com.

Disclaimer
KEIRETSU FORUM IS A FACILITATOR BRINGING TOGETHER INVESTORS AND EARLY STAGE COMPANIES OFFERING GENERALLY HIGH-RISK INVESTMENTS. KEIRETSU FORUM IS NOT AFFILIATED WITH THE PRESENTING COMPANIES AND DOES NOT ENDORSE, INVEST IN, ASSIST WITH INVESTMENT IN OR RECOMMEND ANY OF THE COMPANIES (OR THE SECURITIES OF SUCH COMPANIES) THAT MAY SEEK FUNDING THROUGH KEIRETSU FORUM MEMBERS, AND RECEIVES NO SUCCESS FEES OR OTHER COMPENSATION FOR ANY FUNDING THAT MAY OCCUR (ALTHOUGH KEIRETSU MEMBERS AND/OR VOLUNTEERS MAY HAVE AN ECONOMIC INTEREST OR AFFILIATION WITH PRESENTING COMPANIES WHICH KEIRETSU REQUIRES THEY DISCLOSE). ACCORDINGLY, ANY INFORMATION OR REPRESENTATIONS GIVEN OR MADE BY ANY PRESENTING COMPANIES MUST NOT BE RELIED UPON AS HAVING BEEN REVIEWED FOR ACCURACY OR AUTHORIZED BY KEIRETSU FORUM. ANY OFFERS TO, OR INVESTMENTS MADE, BY A MEMBER OF KEIRETSU FORUM WILL BE TO OR IN HIS, HER OR ITS INDIVIDUAL CAPACITY AND NOT ON BEHALF OF KEIRETSU FORUM. CONSEQUENTLY, INVESTORS MUST CONDUCT THEIR OWN DUE DILIGENCE IN CONNECTION WITH ANY INVESTMENT IN COMPANIES, INCLUDING BUT NOT LIMITED TO LEGAL, TAX AND INVESTMENT ADVICE.

Article source: http://finance.yahoo.com/news/call-applications-keiretsu-forum-angel-153000408.html

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Infosys co-founder S. Gopalakrishnan, who recently exited the post of Executive Vice-Chairman, hopes to continue with angel investing in technology start-ups, besides pursuing opportunities in investing and supporting brain research.

Speaking on the sidelines of a media conference to announce the CII’s 10th India Innovation Summit, Mr. Gopalakrishnan said: “Obviously, what I know well is technology. Within this, the areas of digital marketing and e-retailing appear to be hot.” He said he might look at these fields as potential investment areas after his retirement in October.

Mr. Gopalakrishnan has not invested in start-ups till now. However, he has investments in Start-up Village, a business incubator in Kochi, jointly funded by the government and some private investors. The Infosys co-founder is the chief mentor of the venture. He said it was innovation in the world of IT that interested him, a field seeing quick blurring of lines between products and services.

Earlier this year, Mr. Gopalakrishnan had announced a donation of $1.80 million to Carnegie Mellon University to set up a partnership with the Centre for Brain Research (CBR) at the Indian Institute of Science (IISc.) here. The CBR is also set up with a contribution from his Prateeksha Trust. Mr. Gopalakrishnan hoped that centre would evolve into a “world class centre, which would research into diseases and finding cures for conditions such as Alzheimers, Parkinsons and Dementia.” “I hope we can focus on one aspect of the brain, that is, understand how the brain ages,” he added.

As chair of the CII’s National Committee on Innovation and Entrepreneurship, he said he wouldfocus on taking the message across the country, including rural areas. “I am thinking of some specific programmes on rural innovation.” Apart from these activities, Mr. Gopalakrishnan said he and his family would continue their interest in philanthropy.

Mr. Gopalakrishnan announced that the Indian Innovation Summit, themed Innovation for inclusive growth, would be held here on August 8 and 9.

Article source: http://www.thehindu.com/business/Industry/infosys-cofounder-plans-angel-fund-for-tech-startups/article6281157.ece?utm_source=RSS_Feed&utm_medium=RSS&utm_campaign=RSS_Syndication

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It has been a year since the JOBS Act of 2012 went into full effect, creating a new class of investments for retail investors: start-up funding for prepublic companies. Once the purview of the very wealthy, the Jumpstart Our Business Startups Act allowed accredited investors—defined as those with $200,000 in annual income ($300,000 for couples) or a household net worth of $1 million or more, not including a primary residence—to provide angel investing. A primary motivation was to help create more employment opportunities.

Article source: http://online.barrons.com/news/articles/SB50001424127887324616904580108320908721494?mod=rss_barrons_most_viewed_day

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Is it rude to think about how to leave someone the first time you meet him? Perhaps. But in the risky world of angel investing, top angels think about the exit the first time they meet the entrepreneur.

Angels want to know that the CEO of the business they are investing in understands which companies could acquire them and why. They want to know the role they and other investors like venture capitalists (VCs), will play in an exit. Starting the relationship on common ground decreases the chance of an exit derailing later.

Sophisticated angels know that one investment in 10 provides nearly all of their returns. Driving a successful exit helps to increase the odds of a favorable investment return. While some angel investors can do this on their own, many benefit from joining an established angel group, which brings the power of many experienced angels to lead investments, serve on company boards, and help drive excellent exits.

Dr. Tom McKaskill, in his book, Ultimate Exits, advises entrepreneurs to “Start the process by thinking of your business as a product you are going to package for a very selective customer…the buyer who will pay the highest price.”

John O. Huston, founder of Ohio TechAngel Funds and a founding member of the Angel Capital Association, suggests that great exits start with three entrance questions:

  • Is there exit goal congruence between the investors and the entrepreneur?
  • Who will drive the exit – angels or VCs?
  • Can they do so successfully?

To determine if there is exit goal congruence with entrepreneurs you are considering investing in, Huston suggests sharing data on recent exits in their industry and region. The data discussion opens eyes and builds understanding, as many entrepreneurs plan on an unusually large exit such as Facebook’s recent $19 billion acquisition of WhatsApp but a $50 million to $200 million is more likely.

Then ask: “If we decide to invest in your company we will work really hard with you over the next three to five years so that we can sell your venture and put X-many millions of dollars in your pocket, is that an adequate outcome for you and your family in light of all the hard work ahead?”

If the answer is yes, proceed with due diligence.

Another question to ask before investing is whether venture capital is needed for a successful exit – and what that means to you as an angel investor. Companies requiring millions of dollars will need to attract VC money later, and it is important to understand the consequences.  Ask:

  • Can we raise the requisite angel and VC capital with this CEO?
  • Which angel director will ensure all non-dilutive sources of capital have been accessed?
  • Can the lead angel drive the exit?
  • Which directors have raised VC money in the past?
  • How does bringing in VCs impact the ultimate exit? 

Don’t automatically assume VC goals are aligned with angels’ goals. Understand that not only may your investment get diluted as VCs put in later and larger investments, and that VCs may have different ideas about company leadership or an exit. It is important to vet the VCs to avoid exit disagreements between entrepreneurs, angel directors and VC directors.

After making an investment, lead angels will be asked to drive returns and the exit. Angels wanting additional training in this area should consider using the resources of an angel group or professional association. For example, Golden Seeds offers a “Coach to Exit” course and the Angel Capital Association offers sessions at its professional conferences. Three books also provide great advice:

Plotting a successful strategic exit requires identifying the appropriate “customer” for the business. Is the entrepreneur looking to sell to financial or strategic bidders? It’s important to understand the difference. While financial bidders are concerned mainly with growing earnings, strategic bidders will ask how the acquisition leverages their assets and capabilities and assess what happens if their competitor acquires the company.

Angel investors have much to gain by supporting innovative startups. Just remember, before jumping in, ask the important questions about exit strategies to increase the odds of success.

Article source: http://www.forbes.com/sites/mariannehudson/2014/08/22/successful-exit-strategy-secrets-know-how-to-get-out-before-you-get-in/

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The incumbents of the traditional financial services world—banks and VCs, for example—do some things well. Unfortunately, for them, a wave of upstarts is taking advantage of what many traditionalists don’t do well: move at the speed of today’s economy and today’s American small business.

OnDeck OnDeck Capital Inc., on the brink of an IPO, is one of the best examples of how native online finance businesses are using speed to slay the traditional finance industry . Of the many technology-driven benefits OnDeck brings to online business lending, I would say one in particular stands out. Speed.

As the founder and CEO of an equity crowd funding platform that facilitates private equity investments in consumer and retail businesses, I see this same disruption taking hold in private equity. Although consumer and retail represent 25% of the economy, it represents less than 5% of angel investing. That is despite data that shows strong returns in the space (3.6x returns in 4.5 years on average according to the Kauffman Foundation). By bringing together investors and businesses on our online platform, we are now able to help companies raise capital in an average of 61 days. Speed wins.

FinTech Upstarts like OnDeck Capital have an enormous advantage over century-old competition: speed.

FinTech Upstarts like OnDeck Capital have an enormous advantage over century-old competition: speed.

Speed. The American financial system has forgotten it. OnDeck CEO Noah Breslow and others in this new generation of native online finance companies are laser focused on using technology, data and scalable online business models, such as marketplaces, to help high-potential companies get growth capital—and fast.

Consider OnDeck’s Term 24 product unveiled last February: a business can get a decision on a 24-month term loan within 24 hours. What traditional bank can do that? Interestingly, there is a value to this speed irrespective of whether or not the loan application is approved or denied. Even if denied, the applicant is able to move on to the next financier without having lost much valuable time. The maddening back and forth small businesses are so often subjected to during the loan process—gone.

OnDeck says 60% of its customers considered borrowing from traditional sources, but the majority did not apply because they thought the process would take too long. A 2013 New York Federal Reserve survey found that small businesses spend 26 hours searching and applying for credit. Add to that the process to apply, plus the days or weeks for a traditional lender to review a loan application and come back with a “Yes” or “No” and it’s easy to see why OnDeck grew 150% in 2013  and has now lent more than $1 billion.

Leading venture capital firms, including Google Google Ventures, SAP SAP Ventures, RRE Ventures, Institutional Venture Partners and Tiger Global, have backed companies that use data and online distribution because those companies represent the future of financial services. (Disclosure: Google Ventures is also an investor in CircleUp).

All indications are OnDeck will become one of the first of a new wave of native online financial institutions to go public. And OnDeck is not alone. Online marketplace lender Lending Club Lending Club, which has provided consumer lending since 2007 and added small business loans in early 2014 isn’t far behind.

Financing 2.0 is upon us. We are at a turning point. The tremendous cost-and-time savings of the internet in the solicitation and investment of capital—whether it is through lending or equity capital—can no longer be ignored. Meanwhile, behind the scenes, internet technology is enhancing the efficiency of underwriting, data aggregation and analysis, and risk management. Online marketplace lenders can reduce lending costs by more than 400 basis points compared to traditional banks.

And banks are struggling to keep up. From June 2008 to June 2011, banks cut back small business lending 18%, twice the rate of decline for lending to all types of businesses during the Great Recession. Still recovering from the economic slowdown, banks have more recently had their hands full rebuilding their reputations, much less their loan portfolios.

“Banks are already starting to cede ground to start-ups and other competitors drawing on big data-enabled approaches, especially for smaller, unsecured loans. These trends represent the leading edge of a broader assault on lucrative small business lending by lightly regulated and more nimble institutions,” McKinsey says in its report Digital Models for a Digital Age: Transition and Opportunity in Small Business Banking.

Speed is the key. Thirty to forty percent of small businesses surveyed by McKinsey Co. said they would consolidate bank accounts with a provider that could reduce the time involved in the loan application process and provide more certainty of the outcome.

OnDeck and Lending Club’s anticipated IPOs may be a wakeup call for traditional banks. Alabama-based BBVA Compass is referring small business customers to OnDeck for potential loans that the regional bank can’t provide. San Francisco Wells Fargo has now announced the creation of a business accelerator in the hopes of getting more in tune with the financial services upheaval occurring in its backyard.

Such high-profile moves by traditional banks are an acknowledgement, albeit late, that a major transformation is under way. As more companies see cost and service benefits of an online model, new companies will emerge, and they will grow rapidly to allocate capital—through both lending and equity investing—faster and more efficiently. That’s exciting for emerging companies transforming financial services and it has to be welcome news for fast-moving American business.

Article source: http://www.forbes.com/sites/ryancaldbeck/2014/08/21/banks-cant-keep-up-fintech-startups-innovating-at-a-breakneck-pace/

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Is it rude to think about how to leave someone the first time you meet him? Perhaps. But in the risky world of angel investing, top angels think about the exit the first time they meet the entrepreneur.

Angels want to know that the CEO of the business they are investing in understands which companies could acquire them and why. They want to know the role they and other investors like venture capitalists (VCs), will play in an exit. Starting the relationship on common ground decreases the chance of an exit derailing later.

Sophisticated angels know that one investment in 10 provides nearly all of their returns. Driving a successful exit helps to increase the odds of a favorable investment return. While some angel investors can do this on their own, many benefit from joining an established angel group, which brings the power of many experienced angels to lead investments, serve on company boards, and help drive excellent exits.

Dr. Tom McKaskill, in his book, Ultimate Exits, advises entrepreneurs to “Start the process by thinking of your business as a product you are going to package for a very selective customer…the buyer who will pay the highest price.”

John O. Huston, founder of Ohio TechAngel Funds and a founding member of the Angel Capital Association, suggests that great exits start with three entrance questions:

  • Is there exit goal congruence between the investors and the entrepreneur?
  • Who will drive the exit – angels or VCs?
  • Can they do so successfully?

To determine if there is exit goal congruence with entrepreneurs you are considering investing in, Huston suggests sharing data on recent exits in their industry and region. The data discussion opens eyes and builds understanding, as many entrepreneurs plan on an unusually large exit such as Facebook’s recent $19 billion acquisition of WhatsApp but a $50 million to $200 million is more likely.

Then ask: “If we decide to invest in your company we will work really hard with you over the next three to five years so that we can sell your venture and put X-many millions of dollars in your pocket, is that an adequate outcome for you and your family in light of all the hard work ahead?”

If the answer is yes, proceed with due diligence.

Another question to ask before investing is whether venture capital is needed for a successful exit – and what that means to you as an angel investor. Companies requiring millions of dollars will need to attract VC money later, and it is important to understand the consequences.  Ask:

  • Can we raise the requisite angel and VC capital with this CEO?
  • Which angel director will ensure all non-dilutive sources of capital have been accessed?
  • Can the lead angel drive the exit?
  • Which directors have raised VC money in the past?
  • How does bringing in VCs impact the ultimate exit? 

Don’t automatically assume VC goals are aligned with angels’ goals. Understand that not only may your investment get diluted as VCs put in later and larger investments, and that VCs may have different ideas about company leadership or an exit. It is important to vet the VCs to avoid exit disagreements between entrepreneurs, angel directors and VC directors.

After making an investment, lead angels will be asked to drive returns and the exit. Angels wanting additional training in this area should consider using the resources of an angel group or professional association. For example, Golden Seeds offers a “Coach to Exit” course and the Angel Capital Association offers sessions at its professional conferences. Three books also provide great advice:

Plotting a successful strategic exit requires identifying the appropriate “customer” for the business. Is the entrepreneur looking to sell to financial or strategic bidders? It’s important to understand the difference. While financial bidders are concerned mainly with growing earnings, strategic bidders will ask how the acquisition leverages their assets and capabilities and assess what happens if their competitor acquires the company.

Angel investors have much to gain by supporting innovative startups. Just remember, before jumping in, ask the important questions about exit strategies to increase the odds of success.

Article source: http://www.forbes.com/sites/mariannehudson/2014/08/22/successful-exit-strategy-secrets-know-how-to-get-out-before-you-get-in/

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O'Shaughnessy, Tim cx

Former LivingSocial CEO Tim O’Shaughnessy has become an angel investor in two companies in recent weeks.





Grand Estate15 photos







Bill Flook
Staff Reporter- Washington Business Journal

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Put down the phone, step away from the keyboard, rip up that hand-written “Dear Tim” letter. Tim O’Shaughnessy is not on some sort of post-LivingSocial angel investing spree. Cold contacting him probably won’t work.

O’Shaughnessy, who stepped down last week as CEO of the District-based deal provider, has put his name on two startup investments this month. He joined Steve Case and New Enterprise Associates in putting $1.25 million into Lanham-based custom-framing company Framebridge, and on Wednesday co-invested with Revolution Ventures in a $7 million Series A for Baltimore’s OrderUp, a food ordering and delivery startup.

The close timing of the two deals is “much more happenstance” than anything else, O’Shaughnessy told me in an interview Wednesday afternoon. In both cases, he has some prior connection or knowledge of the company. Framebridge CEO Susan Tynan is a former general manager at LivingSocial. On OrderUp, O’Shaughnessy said he’s followed the company for some time, and has “known the online ordering space quite well.” OrderUp has also employed several former LivingSocialites.

“I don’t think this [angel investing] is what I will be spending a huge amount of time on,” he said. “If I like the team and I like the space, and I think there is good upside, I’ll potentially get involved with the company.”

Framebridge and OrderUp, he believes, both have the ability to create a barrier to entry for competitors if they can hit a certain scale. “One of the things that LivingSocial taught me was if you can figure out how to scale something both online and offline, you build up a pretty good moat.”

Bill Flook covers technology, biotech and venture capital.



Article source: http://www.bizjournals.com/washington/blog/techflash/2014/08/despite-back-to-back-angel-deals-tim-oshaughnessy.html

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