angel, angel groups, angel networks, angel capital association, svb, investing, vc, usa, aca, stanford, burton lee

1. Stanford European-US Angel Investor
Groups Mini-Summit
Angel Investing Going Global
Stanford University – School of Engineering
May 18, 2009

2. Overview - U.S. Angels

3. General Characteristics of Angel Market in the U.S.
• Over 300 Angel Groups in U.S.
• Estimated $19B Invested in 2008 by All Angels
• Fund vs. Network
• Focus - Industry Verticals vs. Agnostic
• Sophisticated, Casual and Super Angels
• Syndicating Deals

4. Growth in Number of Angel Groups in U.S.
300
250
200
150
100
50
0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Sources: Center for Venture Research (pre 03 data) and Kauffman Foundation/ACEF (04-09 data)

5. Typical Profile of What Angels Invest In
• Product is developed or near completion
• Company has existing customers or pipeline of
potential customers who can validate demand
• Entrepreneur has invested own dollars and exhausted
other alternatives (including friends and family)
• Company is likely to grow rapidly and reach at least
$15-30M in revenues in the next 3-7 years
• Business plan is well thought out

6. Stage U.S. Angel Groups are Investing In
Startup
Profitable 8%
3%
Product
Shipping Development
53% 36%
Source: 2008 ACEF, SVB and Dow Jones Angel Group Data Surveys

7. Where are U.S. Angel Groups Investing?
Business
Other Financial Svcs.
6% 18%
Consumer
Goods
3%
Information
Technology Consumer Svcs.
35% 6%
Energy/
Utilities
Industrial Goods 2%
Healthcare
5%
25%
Source: 2008 ACEF, SVB and DowJones Angel Group Data Surveys

8. Average Preferred Investment per Round
(per Group)
< $150,000
$150,000 - $250,000
$250,000 - $500,000
$500,000 - $750,000
> $750,000
0 10 20 30 40 50
Percent of
Source: 2009 ACA Angel Group Confidence Survey and 2008 Member Directory Groups

9. Angel Group Investment Structure
Network/Sidecar
(7.8%)
Fund (22.2%)
Network (69.8%)
Source: 2008 ACA Member Directory/ 2009 membership applications – 166 groups reporting (2006-2009)

10. Groups Led by Members or Hired Managers
Both (3.4%)
Manager (41.1%)
Members (54.8%)
Source: 2008 ACA Member Directory/ 2009 membership applications – 146 groups reporting (2006-2009)

11. U.S. Angel Group Organizational Structures
No Structure
For Profit 59% Non Profit 25% 16%
40
35
30
25
20
15
10
5
0
LLC LP C-Corp 501c3 501c4 501c6 Non-Profit None
Source: 2008 ACA Member Directory/ 2009 membership applications – 162 groups reporting (2006-2009)

12. Typical Deal Process for an Angel Group
Screening Team General Meeting
Submissions Diligence & Term Manage
Review Presentations
(~30 Plans Sheet Negotiations
(5 – 10 Plans (1 – 3 Plans Investment
Per Month) (Coordinated by
Per Month) Per Month)
Managing Director
& Deal Lead)
Managing Director Deal lead closes
Screening polls members for transaction and Board
Managing team votes level of investment the sidecar fund member
Director pre- on which interest in deals, invests in represents
recruits diligence companies that
screens companies to team, and member
attract at least
emailed invite to facilitates $250K in interests and
submissions general selection of deal investment from seeks an
meeting lead to begin term at least 5 attractive exit
sheet negotiations members
Source: James Geshwiler, Common Angels Boston, MA

13. Co-Investment and Follow on Preferences
Individual angels
Other angel groups
Early-stage VC
Later-stage VC
Family offices
Other private equity
No co-investment
0 20 40 60 80 100
Source: 2008 ACA Angel Group Confidence Survey

14. Angel Capital Association
• Professional association of angel investing groups in
North America
• Mission: Support the growth, financial stability, and
investment success of member angel groups.
• Professional development
• Best practices
• Networking
• Collaboration strategies
• Public policy voice for American angel groups

15. Summary of ACA Membership – April, 2009
Full Members 146
Provisional Members 16
Accredited Investors in Groups 7,062
States & Provinces 49
Affiliate Organizations 19

16. Members and Affiliates – April, 2009
Full Members
Provisional Members
Affiliates

17. Questions?
Laurie Lumenti Garty Marianne Hudson
Managing Director Executive Director
SVB Capital Angel Capital Association
3000 Sand Hill Road 8527 Bluejacket St
Lenexa, KS
Building 3, Suite 160
PH: 913-894-4703
Menlo Park, CA
mhudson@angelcapitalassociation.org
PH: 650.233.4204 www.angelcapitalassociation.org
llumenti@svb.com
www.svb.com