Innovation Summit at NAU September 9, 2012 James Goulka
Managing Director Arizona Technology Investor Forum 1
Slide 2
Net worth of $1 million or more Or Income for each of last 3
years $200,000 pa if single $300,000 pa if married 2
Slide 3
No liquidity Unproven management Unproven technology Unproven
markets Unknown competitors lurking in the bushes No predictability
3
Slide 4
$20 billion invested in 2010 61,900 deals in 2010 Source:
Center for Venture Research, University of New Hampshire 2011
4
Slide 5
Able to assess and absorb the risk Invests own money Invests
brainpower Due diligence on investment Board or Advisor Know-how
Invests time Opens contact database 5
Slide 6
6
Slide 7
Super Angels (Ron Conway) Domain Magnets (Pat Sullivan, the
Crowns) Angel Groups (ATIF) 7
Slide 8
Can make smaller investments ($25,000) Leverage from multiple
brains Leverage from single center Shared due diligence Aggregated
capital = better terms Multiple ways to invest Multiple ways to
participate Fun 8
Slide 9
55 Phoenix individual investors Entrepreneurs, Technology
Executives, Accountants, Lawyers, Investment Bankers, Consultants
23 investments $6.2 million invested Direct and through ATIF
Sidecar Fund I Partner with Desert Angels & NM Angels 9
Slide 10
Software & SaaS Semiconductors & Sensors New Materials
Non-invasive medical devices Capital efficient green tech 10
Slide 11
The business, not the technology What is the pain point? How
acute is it? The customers Who are they How many of them are there
How do you get them? Why will they pay for your solution? 11
Slide 12
Where Arizona Southwest Size: $250,000 - $1,500,000 Stage
Prototype or Alpha customer Revenue not required (but nice) 12
Slide 13
Valuation 13
Slide 14
2 equal sized investments Target Return for portfolio: 25% p.a.
At the end of year 1: 1 fails: complete loss Need 50% p.a. on the
other one Critical Problem: Dont know which is which Therefore
expect 50% p.a. on all 14
Slide 15
Achieve 50% returns by explosive growth Not linear growth, eg
service businesses Technology powers the growth 3-5 year investment
horizon Not the grid, but controllers of the grid Not Vinod Khoslas
science projects Not businesses to hand to your children Exit
typically sale to large entity 15
Slide 16
Deal Terms Due diligence Taking care of the team: Option Pool
Governance 16