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ImportantThingsYouNeedtoKnowtoHelpYouRaiseCapital:AnAngelInvestorOverview

2017CIS-IEEEEngineeringConference(Encon)

November11,2017

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OscarMoralez– BS,MedicalTechnology(Univ.ofTexasSouthwesternMedCenter)– MBA(Univ.ofColorado)– CorporateExperience(13yrs)

• BoulderCommunityHospital,Boulder• MayoMedicalLaboratories,Rochester• CovanceLaboratories,Indianapolis

– Entrepreneur(>15yrs)• VisionTech Partners(Founder&ManagingDirector)• StepStoneBusinessPartners(Founder&ManagingDirector)• BioStorage Technologies(FounderandCOO)

– $3.5millionangelcapitalraised(Indiana/Texasangels)– $6.0millionventurecapitalraised(NYVC)– AcquiredDec2015for$130millionbyBrooks(NASDQ:BRKS)

– AngelInvestor(>10yrs)• 29portfoliocompanies

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Wheredoesthemoneycomefrom?

CapitalRaiseAmountsbySource

Source:AngelResourceInstitute 4

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AngelsversusVC

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• Formedin2009• LargestAngelinvestornetworkinIndiana(100+members)• Chapters

– Indianapolis– FortWayne/Warsaw– GreaterLafayette(PurdueUniversity)– Bloomington(IndianaUniversity)– AngelBOM(IUBusinessofMedicine)

• AccreditedInvestors– Diversegroup(physicians,attorneys,financial,businessleaders,

entrepreneurs,academics,athletes,etc.)• ACA-certifiedAngelGroup• SectorFocus:InformationTechnology,LifeSciences,MedicalDevices,

AgriculturalTechnology,AdvancedManufacturingTechnology• GeographicFocus:Indiana/Midwest

VisionTechAngels:StrengthinCommunity!

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VisionTechAngelsOverview

• Haveinvested ~$12millionin29companies– Average:9-12membersperdeal– InvestmentAveragepermember:$25,000– Averagedealrangeof$200K- $500K+– Goalis20X+returnin5-7yearsforeachinvestmentwhileexceeding

industryaverageof22%-27%IRRinportfolioreturn• Portfoliocompanieshavegoneontoraiseover$200million• PortfolioStrategy

– 20+companiespermember• 6 Exits

– (1)lostall;(2)returnedpartialcapital;(3)returnedhigherthaninvestedcapital

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• DealFlow…………………………………………………………………………………………….……..– 400+applicationsreviewedeachyear– 50-75selectedforscreeningeachyear– 12-15selectedeachyearforpresentationtoangelgroup– 4-6newinvestmentsperyear– 5-10followoninvestmentsperyear

• PresentationstoAngelChapters………………………………………………………………..– 6xperyear– 12-15companies

• DueDiligence– Team/Analysts/Angels/Network/Syndicate– Comprehensive– Objective– Average4weeks

• PublishDueDiligencereporttoallmembers;CapitalCall• CloseTransaction…………………………………………………………………………………….….

– Singlepurposeentityforinvestment• PortfolioManagement

– VisionTechPartners

VisionTechAngelsInvestmentProcess

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1-2Months

1-2Months

Total:2-4Months

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InvestmentParameters

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• Sectoragnostic• Stage

– Prerevenuehastobecompelling– Earlycommercialization(beta,pilot,etc.)– Greaterthan$250Kinannualrevenue

• MarketSize– Greaterthan$250million(addressable)

• Pre-MoneyValuation– Lessthan$6million

• SizeofRound– Lessthan$2million

• PreferredEquityorConvertibleDebt– Nocommonstock

• 10-20%equityownershipposition• Potentialfor20-30XormoreROI

Characteristicswelookfor…

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• Chooseyourteam wisely– Numberonereasonangelsinvest– Stageappropriateteam

• Knowwhatyoudon’tknowandgethelpearly– Advisors/board– Peers/teammembers

• Goodplanning andexecution arekey– Problemsolving,flexible,adaptable,quickness

• Communication iskey(timely,complete)– Goodandbadnews– Regularreports(operations,financials,keyhighlights)

• Cash isking– Manageitresponsibly

• Sell,sell,sell…customerandmarketvalidation

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FundraisingLessons

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• Timeconsumingprocess• Planinadvance(months)• Buildanetwork(entrepreneurs/investors)• Knowyouraudience(investors)• Knowyourbusiness• Managetheprocess• Capitalisavailableforagoodopportunities

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OscarMoralez,ManagingDirectoromoralez@visiontech-partners.com