FI Montreal Spring 2014 July 23 Bootstrapping & Fundraising ANGES QUEBEC

CONVINCING ANGELS

ABOUT ANGES QUÉBEC

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A NETWORK OF ANGEL INVESTORS

Anges Québec is a network of 155+ business

people – mostly entrepreneurs – who have been

successful. They invest their money, expertise

and network in innovative companies throughout

Quebec.

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� Creation: 2008

� Invests in Quebec companies

� 3 geographical clusters – Quebec City, Montreal and

Sherbrooke

� 50 investments and re-investments (25 in last year)

� 80% of companies financed didn’t have significant

revenue at time of investment

� 0% were profitable

PROFILE

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� Expected return: 5 to 10 X in 4 to 7 years.

� Average pre-money value = $3M

- Minimum $1M - Maximum $6M

� Investments range from $200K to $1.2M

� Average investment round of $450 000 / 10

angels

� + Anges Québec Capital Fund (up to $500K

extra)

PROFILE

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APPROACHING ANGELS

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IDEALLY, THEY’RE ALREADY IN YOUR NETWORK

� You know them OR you know people who know them

� Start developing the relationship even if you don’t need

funding right away.

- Industry expertise

- Mentors, advisors

ANGES QUÉBEC

� Referral by a member – especially one who is ready to invest

� Set out process for funding application and investment

WHERE TO FIND ANGELS

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ANGES QUÉBEC PROCESS

7. FUNDING AND FOLLOW-UP

6. DUE DILIGENCE

5. PRE-DILIGENCE AND TERM SHEET

4. DETAILED PRESENTATION TO INTERESTED ANGELS

3. PITCH BEFORE ALL ANGELS

2. SELECTION COMMITTEE

1. SUBMISSION VIA WEBSITE

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CONVINCING ANGELS

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� Include enough details so we can get a good

idea of your business and the investment

opportunity.

– Normally a 30 to 40 page PowerPoint or a 15 to 20

page Word document is sufficient.

- Investor deck and/or business plan

- Financial statements (if applicable) and projections

DOCUMENTATION NEEDED

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� Innovation, no matter the industry

� A product or service that stands out and meets a real

need / solves a real problem.

� A large market with high-growth potential

� A simple and realistic game plan

� A reasonable deal (pre-money valuation)

� Leadership that is passionate, organized, realistic, that

listens to feedback and knows how to make decisions.

WHAT DO ANGELS WANT TO SEE?

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1. Document your business plan

2. Strong, well-rounded team and respected advisors

3. Industry expertise – be visible

4. Build an MVP and gain learnings

5. Sales / customers / users OR letters of intent

6. Progress and momentum

7. Intellectual property

8. Strategic partnerships

9. Personal investment

EARLY TRACTION

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PLANNING AN EXIT STRATEGY

EXIT OPTION

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NEW INVESTMENT IN THE COMPANY

MANAGEMENT BUYOUT

IPO

MERGER & ACQUISITION

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� Setting up your business for a future sale.

� Multi-disciplinary diagnostic to determine areas of

improvement that can impact company valuation.

BUSINESS STAGING

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ANALYZE THE COMPANY FROM DIFFERENT ANGLES:

BASED ON THIS ANALYSIS:

• Financial

• Operational

• Strategic orientation and market positioning

• Analysis of standard financial ratios in industry

• Identify key factors specific to your company and industry.

• Prepare an action plan to strengthen these factors to maximize company value.

INCREASE VALUE AND DECREASE RISK

SALES

MANAGEMENT

FINANCES

� Diversity of clientele

� Strong customer relationships

� Innovative products

� High-growth industry

� Management team

� Sharing of responsibilities

� Lack of diversity of clientele

� Client churn rate

� Products / services at end of life cycles

� Low-growth industry

� One-man show

� Outdated or non-functional management structure

� Not profitable or low-growth

� Financial ratios not in keeping with industry standards

� Profits and growth

� Financial ratios in keeping with industry standards

HIGH VALUE LOW VALUE

� Questions?

� Thank you!

IN CONCLUSION

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Caroline Pelletier

caroline.pelletier@angesquebec.com

514-824-1132