Prepare a killer presentation. Learn
about the venture capital fund raising process. Search for capital
in several databases by type of funds / location / industry / size
of investments in angel groups, incubators and venture
Funding Workbook / Angels / Incubators /
VC Process / VC DB
Angels are your
best bet to secure the funding you need after the Friends & Family
round and before the VC round. Angels in the NY city area are difficult to
find and generally do not invest in groups. There are several so called
'angel' groups. Believe me, I have not found an angel among them! I have
been very lucky. I found my angels at a law firm and through my doctor. I
raised $500,000 through a private placement.Keep in mind that
angels as well as VCs invest within a 100 mile radius. Don't waist your
time even if they say they will invest anywhere - they
||Access to Capital Electronic Network
- The largest angel group in the country. $450 for
Helps companies and investors establish an early and
cost-effective means to safely exchange vital information and
establish credibility over the Web. The Company's mission is to
build a worldwide online private capital finance portal to attract
and service the small business and accredited investor marketplace
with "best of breed" products and services.
New York, NY
|A couple of
guys in NY that had an idea and couldn't find anyone to fund it so
they started angeltips.com
. They were recently bought out by Earlybirdcapital.com. They
have received lots of publicity but I have yet to meet anyone that
has closed on funding from their angel group.|
New York, NY
NYNMA is a not-for-profit industry
association founded in 1994 to support and promote the new media
industry in New York with over 7000 individuals representing
nearly 2500 companies. They are also associated with Starvest
Partners, L.P., a VC in NYC. I met with them and was not impressed with
their lack of professionalism!
angelstreet.com connects accredited
investors, venture groups and private equity funds. High-net-worth
individuals and institutions now can invest side-by-side with
professional lead investors. One problem, the minimum amount
to be involved is $3,000,000.
New York, NY
|An angel group in NYC. Not
much information is available.|
|A NYC provider of private
equity, venture capital, and alternative investment products for
high net worth investors and institutions. Not much information is
available about them.|
|UniversityAngels.com is an on-line
angel marketplace and entrepreneurship resource devoted exclusively
to students and graduates of the world's leading universities.
||Located in CA, they have a
large accredited community where they e-mail new
The Band of Angels
3130 Alpine Road
Portola Valley, CA 94028
Based in Silicon Valley,
The Band of Angels is one of the most
well-known Angel groups. It consists of approximately 140 members
and generally focuses on Internet and High Tech investments.
The Gathering of Angels
Phone: (505) 982-3050
The Gathering of
Angels encompasses a large forum, allowing any
interested Angel investor to be included on its approximately
1,500-person mailing list. Based in Santa Fe, New Mexico, The
Gathering of Angels presents selected entrepreneurs to potential
investors at its regular meetings and provides industry experts to
assist Angels in the due diligence process.
The Capital Network
is a selective Angel matching service that provides
forums aimed both at assisting entrepreneurs in business development
and assisting Angels in their search for viable investment
Tech Coast Angels
is a technology-focused Angel group that invests in
and assists companies located in Southern California. The group
generally funds seed-stage businesses with capital requirements of
less than $1 million. Southern California
The Angel Breakfast Club
668 High Street
Alto, CA 94301
The Angel Breakfast
Club is an organization designed to increase the
exposure of entrepreneurs to early stage capital, skills, and
resources. The group meets monthly to review potential investments.
|Sandles Capital Resources
official verbiage is that they focus on early-stage companies
located in the Northeast to Mid-Atlantic region. They are acting
like a VC with strict requirements before they get involved such as a minimum $3M and revenues. This
is basically a one women show. Ellen is simply acting
as match maker with a low back end fee but lots
of up front "miscellaneous" fees.|
The Angel's Forum LLC
P.O. Box 1605
Los Altos, CA
The Angel's Forum
LLC is a group of private equity Angel investors
interested in investing both time and money in very early stage
companies (typical investments range from $50,000 to $500,000).
Works with companies in the San Francisco Bay Area
Dealing with private investors or "angel
investors" in a Direct Public Offering or "DPO" is a complicated
process. While the process can be started on your own, you
will need professional help along the way. Here we will give you an
overview and lead you to agencies and resources that can help
U-7 Offering Form
This is your
starting point. The U-7 form can be used as a basis for full
prospectus, or it can be the entire offering document. The U-7 Form
is only part of the process and valuable information about the
process is available from the following sources:
North American Securities
This should be thoroughly sources should be
thoroughly studied prior to beginning your offering process.
Completing Offering Document
The North American Securities Administrators Association
provides the U-7 and it's instruction manual. Download the U-7 and instructional
manual and it is
highly recommended that you read through the online
Issuer Manual .
Keep in mind that the manual and the U-7 are
designed only to expedite the completion of an investment offering
document, they are not designed to replace the expertise of a good
securities attorney. You can complete the U-7 on your own, but
for the review and the document filing you will require a Securities
consideration should be given to having audited financial
statements. The stock exchanges require them, and it adds
credibility to your offering with potential investors. Choose
accountants that are experienced in working with smaller companies
and familiar with the requirements of public offerings. In most
cases it is best to first select your securities attorney who can
then recommend accountants that they are familiar with.
Offerings Must Be
You will work with State Securities Regulators
to obtain a permit from at least one state. We have provided a
state-by-state listingof those offices. If you
wish to register in multiple states you should consider having a
regional state review. This can be done by
England Regional Review
The Direct Stock Market
Once through the process
you will need the ability to reach the private investment market
place. An excellent way of doing that is through The Direct Stock Market . The Direct
Stock Market exists to bring registered companies seeking equity
capital and private investors together. Be sure to check them
||LabMorgan is the e-finance unit
of J.P. Morgan. It offers the capabilities of an incubator, venture
capitalist, and catalytic agent. Must be past seed
||Not sure where they are based. Web site is very
Business Incubation Group
|| A NY city
Palo Alto, CA 94301 USA
the Internet's premier matching service for technology-focused
entrepreneurs seeking seed capital and high net worth investors
seeking high-quality startup investment opportunities. Carefully
screened member businesses are presented to the technology
industry's top investors and provided with resources to support the
company's development. These resources, including forums on
accounting and consulting, commercial banking, insurance, law, and
venture capital, allow entrepreneurs to focus more time on building
the product or service side of their business.
||An incubator for Internet entrepreneurs in New
|Net Market Partners
based accelerator for B2B e-commerce
||A CA based
||A CA based incubator.|
||A NY city incubator.|
||A NJ incubator.|
||A NY city
||A NY city incubator.|
|Net Value Holdings Inc.
||A CA virtual incubator.
is the process by which investors fund early stage businesses. A
venture capital funding arrangement will typically entail
relinquishing some level of ownership and control of the business.
The promise of a high return on investment offsets the high risk the
is usually in the form of stock or an instrument which can be
converted into stock at some future date. As the business matures,
an initial public offering may take place, or the business may be
merged or sold. Venture capitalists typically expect a minimum of
30-35% annual return on their investment at the time they are bought
out with an overall target of 10 to 30 times their total investment.
Venture capitalists typically invest in high growth companies within
specific industries of interest. Typical investments range from $1m
- $20m. Management experience is a major consideration in evaluating
A relatively small amount of capital provided to an
investor or entrepreneur, usually to prove a concept. It may involve
product development, but rarely involves initial marketing.
Financing provided to companies that have expended
their initial capital and require funds, often to initiate
commercial manufacturing and sales.
A subsequent investment made by an investor who has
made a previous investment in the company -- generally a later stage
investment in comparison to the initial investment.
Short-term financing which is expected to be paid back
relatively quickly, such as by a subsequent longer-term loan or IPO.
Also called swing loan or bridge financing.
Late-stage venture capital, usually the final
round of financing prior to an Initial Public Offering
A debt instrument offered for purchase by
private investors. Normally with warrants for future stock
purchases at fixed prices.
Offer of an equity ownership position or
a note which has an option to convert from debt to equity.
Public Offering (IPO)
A company's first offering of
stock to the public.
An agreement between firms to work
together on a project for mutual benefit.
Two or more companies combined to achieve greater
efficiencies of scale and productivity. This is accomplished
through the elimination of duplicated plant, equipment, and
staff, and the reallocation of capital assets to increase
sales and profits in the enlarged company.
The act of one corporation
acquiring a controlling interest in another corporation. In an
"unfriendly" takeover", the buying corporation may offer
incentives to stockholders such as offering a price well above
the current market value.
A company's progress makes
positioning for an Initial Public Offering viable. Venture
funds are used to support the IPO.
Preferred Stock (preferred stock offering)
preferred stock is a type of capital stock that pays dividends
at a set rate (at the time of issuance). Dividend payments to
preferred holders must be made before common stock dividends
can be paid. Preferred stocks usually do not have voting
The sale of securities to a small group of
investors (generally 35 or fewer), which is exempt from SEC
registration requirements. The investors execute an investment
letter stating that the securities are being purchased for
investment without a view towards distribution.
An investment banking firm sells
securities from the issuing corporation to the public. A group
of firms may from a syndicate to pool the risk and assure
successful distribution of the issue. There are two types
of underwriting arrangements: best efforts and firm commitment.
With best efforts, the underwriters have the option
to buy and authority to sell securities, or if unsuccessful,
may cancel the issue and forgo any fees. This arrangement
is more common with speculative securities and with
new companies. With a firm commitment, the underwriters purchase
outright the securities being offered by the issuer.
Determine Whether Venture Capital Is
Consider Alternative Sources Of
- Bootstrapping By
Providing Services For Hire
- Angel Investors
(Former Successful Entrepreneurs In The Industry)
- Corporate Partners
- Equipment Leasing
Find The Right Firm - Ask the
- Stage Focus - e.g.
Does the firm invest in companies that have no revenue?
- Geographic Focus -
e.g. Does the firm invest in companies in the Southeast?
- Industry Focus -
e.g. Does the firm invest in Internet companies?
- Size Of Investment
Criteria - e.g. Does the firm invest as little as $500,000?
- Return On Investment
Criteria - e.g. Is the market large enough to create a 30%
annual rate of return for investors?
- Investment Style -
e.g. Does the firm like to take a roll-up-the-sleeves,
"hands-on" approach or a passive advisory approach?
Prepare A Business Plan
Secure An Introduction
- Hook them or lose them in the
first 2 pages - lead with a tight executive summary
- Explain your company's "unfair"
advantage - show why you will succeed in a sea of
- Outline a well-defined product
or service and target market
- Provide good market data and
analysis and a cogent plan of attack
- Demonstrate that management has
the necessary skills to execute its plan
- Show uses of funds and concrete
financial goals and milestones
- Get professionals
who provide services to venture capital firms and portfolio
companies excited to work with you
- Network your way to
your target venture capital firms - elicit professionals'
support and have them provide an introduction as a trusted
- Target lawyers and
accountants who provide services to the venture community
Grab Firms' Attention
- Focus, Focus, Focus - play to
venture capitalists' short attention spans
- Find strong, seasoned managers
willing to work on the team
- Demonstrate a very large future
- Prove the management team's
ability to adapt rapidly and successfully to a changing
- Show escalating barriers to
entry in your market
Make A Powerful Presentation
- Get to the point - Brevity is
the soul of wit
- Focus on the market opportunity
- Technology is a necessary but not a sufficient condition
- Guide the presentation toward
the management, the market and the money
Follow Up With Additional Information
- Bring up any adverse
news or information first and control its dissemination
- Avoid negative
- Provide complete
information when requested
- Make it as easy as
possible to get to "yes"
Understand The Valuation Process
- Identify the major
risks in your business
- Reduce the perceived
risks to increase the value of your company
investors' return on investment criteria - e.g. discount
rates for earlier stage companies are significantly higher
than for later stage ones
- Identify a clearly
definable exit strategy
Internal Rate of Return (IRR) on
a multiple of original capital investment (Horizontal Scale)
realized over an assumed period of years (Vertical
Survive Due Diligence
- Back up sales,
revenue and expense claims with documentation
- Provide solid
- Organize records of
- Secure all
intellectual property rights
- Audit historical
- Examine legal documents with
Close The Deal
- Remember that the
deal is not done until the money is in the bank
Who's getting the cash? Who's giving it?
Discover new venture capital firms, potential partners, new
customers, important executives, vital contact information and more.
Search the entire database of venture capital news articles and
releases by using pull down menus or by using all or part of a word
in the keyword search.
You can search VC investments by Geography, Industry
and Key Word
Search by location
Search by name,
state, min & max deal amount, and the companies they have
Search by deal
amount or location
||Get the latest VC
news and 'How to' information here.
profiles of companies here. You can search by Industry -- Location
-- Annual sales -- Company type and more with a subscription.
||A great site packed
with features like a business plan template, and a Golden Rolodex to
find investors based on your criteria, and much more. |
Venture Capital Insights
||Contacts and "how to" advice for getting
business financing - venture capital, loans, mortgages, IPO.
Plus--New: Free Venture Capital Database File Download|
Euclid's General Partners, Graham Anderson, is a member of
VentureOne's Editorial Advisory Board. The nation's leading venture
capitalists look to VentureOne's information products for serious
venture investment opportunities. VentureOne tracks information on
thousands of venture-backed companies that are seeking additional
rounds of financing. |
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100's of insiders on over 500 venture capital firms.