I attended the Halifax Angel Summit in Halifax last week. Sun Startup Essentials sponsored the event, and I gained a tremendous amount of data, and understanding on what Angel investors are looking for, when they look at you, the startups.
The morning started off with Dan MacDonald, President and CEO of inNOVAcorp. In a powerful and informative keynote, Dan shared his insights on Vetting the The Early Stage Investment Opportunity – READ: How they decide if they are going to give you money!!
Get your pencils poised because below are my Top points that you need to know!
Shelf Life of Financial Guidance is now measured in Minutes: be careful what you listen to and take as gospel
Angels are worried about cash burn and run rate more than ever
New opportunities will be vetted more robustly than ever before
There is a 4-Point Criteria
a. People
Do you have relevant experience?
Do you have the ENERGY that it is going to take?
How collaborative are you?
Integrity?
b. Market
Is the opportunity in a growing market or category?
Addressable Market: 100’s of Millions of Dollars. Yes!
c. Barrier
What is the barrier for competitors?
More than Patents!! What is the recipe of Goodness: Expertise, contacts, and unfair advantage in some wayFundability
You should be able to have a conversation about the above things on a napkin, or a whiteboard.
They are NOT interested in your Consultant-Written, hundreds of pages business plan.
Not about removing every risk: Vetting is defending your thinking. What have you done to VALIDATE your thinking?
What is the most likely business model that would allow this to reach the market?
Yes, they do revenue projections, and they want to understand this from YOU. They want to know 18 months. Leave your 5 year projections at home.
How is it done at inNOVAcorp?
Engage the opportunity (See point 4)
Work with opportunity for several months in an engaged process
Shop your idea to “Retired CEO types”
i. What are your validated, professional set of financials? Yes, they will Check, Check, Check again.
Want to see this in Full? Check out this speech, and others outlined below, at http://www.goldencoast.ca/2008/nao/
Other Sessions at the National Angel Summit Included:
Building a board for early-stage companies
(David Berkus, Keynote Speaker): A good board needs balance, not your best friends. Decide what you want out of your board: Advisors, or Governance. Remember that your board can have control at both a high level, influencing the shape and direction of the business, and the lowest level, controlling your hiring and firing.
Want to go International? Think about the UK; the Enterprise Investment Scheme is a pretty neat Tax program.
(Permjot Valia, keynote Speaker): The UK’s tax relief for income, capital gains, inheritance and investment losses go a long way to ensuring a vibrant and entrepreneurial economy, resilient to economic challenges and well-supplied with the risk capital it needs to grow.
Engineering killer exits
A great panel describes the best ways to Get Out (because you all have begun with the end in mind, haven’t you?)
Marnie Walker, Maple Leaf Angels tells us: If you can, sell your company when you don’t have to. You have time to know your buyers, evaluate terms, and protect your people and business. Austin Hill, co-founder of Radialpoint tells us to realize that investors are interested in what is best for their portfolios, not what is best for your company. Good news is, sometimes you can wait it out, take your learnings, and get back on track. Want to do it right from the start? Good IP, Great teams, Local to the market, you fit a product strategy gap of a bigger company, have a way to get market share, and well, have Revenue Potential.
Till next time!!
Sandra
No comments:
Post a Comment