Attracting Capital From Angels: How Their Moneya€”and Their Experiencea€”Can Help You Build a Successful Company

ATTRACTING CAPITAL FROM ANGELS HOW THEIR MONEY—AND THEIR EXPERIENCE—CAN HELP YOU BUILD A SUCCESSFUL COMPANY......Page 3
Preface......Page 5
Contents......Page 7
Foreword by Bob Bozeman......Page 11
Foreword by Randy Haykin......Page 12
WHAT IS AN ANGEL AND WHAT DO ANGELS WANT?......Page 15
CHAPTER 1 The Fascinating World of Angel Investors......Page 17
Who are angels?......Page 18
Do they have cell phones in the clouds?......Page 20
Risk capital and ultrarisk capital.......Page 22
The climate today.......Page 27
When will angel investing again take flight?......Page 28
The environment of angel investing is constantly changing.......Page 34
CHAPTER 3 What Is an Angel Investor?......Page 38
Demographics.......Page 39
Other angel characteristics.......Page 40
The amount of angel capital available has barely been tapped.......Page 41
Is there an angel out there for everyone?......Page 44
CHAPTER 4 Why Do People Want to Be Angels?......Page 47
To pass along hard-won knowledge.......Page 48
Get ’em while they’re hot.......Page 49
The need to stay in the game.......Page 50
The angel’s challenges are myriad.......Page 55
Finding good deals.......Page 56
Analyzing the opportunity.......Page 57
Learning how to be an angel.......Page 58
Finding angels to co-invest with you.......Page 59
Minimizing woes after the close.......Page 60
Portfolio strategy.......Page 61
Many times, they both get involved.......Page 63
You know they’re out there, but where?......Page 64
One has to invest, one wants to invest.......Page 68
Anything one can do, the other does better.......Page 69
Differing amounts of investment.......Page 72
Differing approaches to management.......Page 73
Investment preferences.......Page 75
What excites angel investors about a deal?......Page 77
Why do angels say no?......Page 84
Strategies for dealing with rejection.......Page 85
Perfection is unattainable, but worth striving for.......Page 87
Profile of a successful entrepreneur.......Page 89
Angel survey results.......Page 95
TYPES OF ANGELS......Page 97
CHAPTER 9 The Many, Many Types of Angels......Page 99
Another way of looking.......Page 101
Women angels, and we don’t mean the Victoria’s Secret kind.......Page 102
Will-work-for-equity angels.......Page 103
Angels who build a technology, not a company.......Page 105
Corporations as angels.......Page 106
CHAPTER 10 When Angels and Venture Capitalists Are on the Same Team......Page 114
A VC fund that welcomes little guys.......Page 115
Stock exchange for private placements.......Page 117
Dumb angels.......Page 119
Angel knows best.......Page 120
Brokers posing as investors.......Page 121
Concierge of Heartbreak Hotel.......Page 123
Presenting the one and only vulture capitalist.......Page 125
PREPARING FOR A GLIMPSE OF HEAVEN......Page 127
A brief tour of securities laws.......Page 129
Keeping a tight grip on your intellectual property.......Page 132
Nondisclosure or confidentiality agreements.......Page 134
CHAPTER 13 Putting Together Your Advisory Board......Page 137
Opening doors to important strategic relationships.......Page 138
Designing an advisory board.......Page 140
Too many cooks?......Page 142
A new kind of status symbol.......Page 143
CHAPTER 14 The Poor, Misunderstood Business Plan......Page 147
Entrepreneurs say the cutest things.......Page 148
What should be included in your business plan?......Page 149
Who should write the plan?......Page 154
How do you know your plan is ready?......Page 155
Why it must be carefully thought out.......Page 156
Structure.......Page 157
CHAPTER 16 Do Angels Put Any Credence in Business Plans?......Page 162
What do angels think?......Page 163
An expression of success.......Page 166
Should you tailor a business plan specifically for angels?......Page 167
Critical mistakes you don’t want to make.......Page 170
The really great presentation.......Page 175
Passion combined with rigorous analysis.......Page 177
Critical mistakes in your presentation.......Page 178
FINDING AN ANGEL......Page 183
Referrals and groups.......Page 185
On-line matching services.......Page 187
How do entrepreneurs think angels find the deals?......Page 190
CHAPTER 19 Why Do Angels Band Together?......Page 192
Types of angel networks.......Page 193
Different meeting structures.......Page 197
How are entrepreneurs selected to present?......Page 203
The mentoring process.......Page 206
What happens when you meet with an angel?......Page 207
First step: construct a perfect angel.......Page 214
Will an intermediary really help you find angel capital?......Page 218
Angels and incubators.......Page 219
What do entrepreneurs advise?......Page 222
Using the media.......Page 225
Building a network.......Page 228
Conferences, forums, and trade shows.......Page 230
YOU’VE FOUND AN ANGEL — NOW WHAT?......Page 233
Angel decision making.......Page 235
Critical factors in the investment decision.......Page 238
Due diligence.......Page 240
CHAPTER 24 The Mystery of Valuation......Page 250
A simple pricing formula for an early-stage venture.......Page 251
ROI expectations.......Page 252
Term sheets.......Page 261
Structure of the deal.......Page 263
How long until closing?......Page 266
A discussion with the founders of Reason, Inc.......Page 269
LIVING WITH AN ANGEL......Page 275
Expertise and contacts.......Page 277
Reporting to the angels.......Page 287
Exit tragedies.......Page 291
Protection of legal agreements.......Page 293
To meddle or not to meddle.......Page 295
Patience is an important angel virtue.......Page 297
Horror stories and advice from entrepreneurs and angels about why things go awry.......Page 298
THE FUTURE OF ANGEL INVESTING......Page 305
The financing of early-stage companies.......Page 307
The problem is all in the geography.......Page 308
How do people in Phoenix view Silicon Valley?......Page 310
Broadening angels’ investment interests.......Page 312
The story of a start-up as told in the year 2010.......Page 318
How things have changed.......Page 319
What can we really expect in the future?......Page 324
APPENDIX Experts Who Contributed to Attracting Capital from Angels......Page 328
Index......Page 335