Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.
Upcoming SlideShare
MDR 2014 final
Next
Download to read offline and view in fullscreen.

Share

Chicago Entrepreneurial Center small business presentation

Download to read offline

How do small businesses interface with startups?

Related Books

Free with a 30 day trial from Scribd

See all

Related Audiobooks

Free with a 30 day trial from Scribd

See all
  • Be the first to like this

Chicago Entrepreneurial Center small business presentation

  1. 1. Why Angel Investing isImportant To SmallBusiness
  2. 2. About Me• Co-Founder of Hyde Park Angels (www.hydeparkangels.com) and WestLoopVentures (www.westloopventures.com)• Blog at pointsandfigures.com Tweet @pointsnfigures• Active investments in: KapowEvents.com, YCharts.com, Brilliant.org,Alltuition.com, Desktimeapp.com, UICO.com, Supply-vision.com,Tallgrassbeef.com• Past Investments: Win Detergent, Noblivity, Shuffletech, FeeFighters,Gradebeam• Trustee at the National World War Two Museum(http://www.nationalww2museum.org) in New Orleans, Louisiana• married, two kids in college; traded for 22 years at the CME where I was onthe Board of Directors• BS Univ of Illinois, College of Business; MBA University of Chicago, BoothGraduate School of Business
  3. 3. WhatYou Do• Small Business provides support forScalable companies• Adds Character to a City• Adds depth by providing income toemployees that become customers ofstartups• Become customers of startups
  4. 4. What StartUps Do• Create businesses that make your businessbetter and more efficient• Create customers for your business• Become customers of your business• Add jobs to the area, increasing yourbusiness potential
  5. 5. 4 Ways To Participate InChicago Renaissance• Talk about startups to your friends• Make an introduction for them to apotential customer• Become a customer• Invest in them
  6. 6. Lifecycle of anInvestment• Investing is HARD WORK !!!!!• Friends and Family• Seed or Angel Round• Series A and B round• Venture Capital Round(s)• Exit
  7. 7. Mistakes• Take money-and that’s all they get• Overvalue their companies• Take too much money• Take too little money
  8. 8. Friends and Family• Small round of money, less than $100k.Structured as Convert Debt. Getscompany going
  9. 9. Angel Round• Convert Debt, or a priced round. Usuallyless than $1M. Gives company 12-18months of runway
  10. 10. Typical Angel Deals• AverageValuation is $1-3M pre-money.• Most seed rounds are between $300k and $1Mdepending on the business• Seed round should be 12-18 mo runway (companyis pre revenue, pre product)• Angels looking for return. Average return for allangel deals is around 27% IRR (Includes the onesthat went bust)• Typical deal is 5-7 years in length.
  11. 11. What An Angel Does• Invest Money• Create Customers, Connections• Mentor and Advise• Help Find Talent for Firm• Create Next Rounds of Financing• Create Possible Exits• Angels typically don’t run companies
  12. 12. Series A and B• Bigger rounds, priced, more runway andallows company to scale up and grow fast• Usually post pivot-scaling in a marketsegment and dominating
  13. 13. VC Rounds• Big rounds of capital done at valuations of$10M +• More scaling, and diversifying business toattack more segments• Playing for big exit (Home Run)
  14. 14. Exit• NOT an IPO• Usually acquisition by another company ora family office, or a PE firm
  15. 15. Why Investing Is Hard• Finding, due diligence, structure, mentoring,post investment management, raising nextrounds of capital, planning for exits• Learning curve of investing
  16. 16. Alternatives• Join an Angel Group• Invest in a Fund (inefficient and scale tips tothe fund managers not you, asymmetricdeal choice )• West LoopVentures (economic incentivesare aligned with GP and LP)
  17. 17. Q+A• Ask me anything you would like

How do small businesses interface with startups?

Views

Total views

507

On Slideshare

0

From embeds

0

Number of embeds

6

Actions

Downloads

2

Shares

0

Comments

0

Likes

0

×