Pre-seed Stage

Seed/Start-up Stage

FUNDING GAP

Early Stage

Later Stages

Founders’ Friends &

Family

AngelInvestors

Very few angel deals done above $1

million

Very few VC deals done below $4 million

Venture Capitalists

$0 $250K $1.5 million $4 million $10 million & up

Financing Life Cycle

DiscoveryProof-ofConcept

ProductDesign

ProductDevelopment

Manufacturing/Delivery

Idea Pre-seedFunding

Seed Funding

Expansion/MezzanineOperating Cap.

Friends and Family

Angels

Seed Funds

Venture FundsFounder

Institutional Equity

Loans / BondsAngel Groups

Start-up Funding

SBIRPhase I Phase II

New Company Formation (USA)

Source of Equity Funds – Typical Year

0 100,000 200,000 300,000 400,000 500,000

500 Classic VCs

1000-2000 Seed Funds

>50,000 Angels

>200,000 Friends & Family

500,000 Startup Companies

Source: Business Dynamics Statistics Briefing: Jobs Created from Business Startups in the United States. Kauffman Foundation, January 2009.

HAIL TO THE JOB CREATORS

Who are Angel Investors?• Often successful, exited entrepreneurs or retired business

persons – Active investors– Invest both time and money in companies

• Accredited investors - SEC definition (US & a few others)• Invest their own money (not money managers)• Generally invest in local companies• Invest at least $20K in businesses not run by family

Angels Fund Majority of Startups in US

Sources: Center for Venture Research/ UNH; NVCA 2013 Yearbook; PwC MoneyTree

• $22.9 billion• 67,030 deals• 23,460 seed• 22,129 early stage• 21,441 expansion • > 268,000

individuals

Angel Investors (2012) • $26.7 billion

• 3,723 deals• 280 seed• 1,647 early stage• 1,796

later/expansion• 522 active firms

Venture Capital (2012)

Angels Provide ~90% of Outside Equity for Startups

20,02924,035

11,445

309

889

1,604

0

5,000

10,000

15,000

20,000

25,000

30,000

Startup/ Seed Early Stage Expansion/ Later

Venture Capital

Angel Investment

Angels Invest in the Majority of Startup & Early Stage Deals

Number of Deals in 2009: Angel Investment and Venture Capital

Source: Jeffrey E. Sohl, Center for Venture Research and 2010 NVCA Yearbook

Angel Capital Association Today• Mission: Fuel the success of angel groups and private

investors who actively invest in early-stage companies• 185 member angel groups• 8,500+ accredited investors• 20 affiliated organizations• 51 states/ provinces• Charitable partner:

Median Angel Round Size Dips Slightly for the Year…

2010 2011 2012$0.00

$0.50

$1.00

$1.50

Median Round Size Mean Round Size

10

*Angel rounds include angels & angel groups only

$980K$900K

$990K

$500K

$625K $600K

$M

Median Early Stage Pre-Money Valuation Stays the Same in 2012

11

*Including all rounds with angel groups before Series A

$2.5MMedian

$1.5M1st Quartile

$3.7M3rd Quartile

$0.11M

$6.6M

2011 20120%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

32.8% 31.9%

24.6%20.9%

9.3%13.3%

7.5% 6.0%1.5% 3.8%3.5% 5.3%4.6% 4.5%

16.2% 14.2%Other

Software

Consumer Pdcts & Svcs

Electronics

Industrial

Mobile & Telecom

Healthcare

Internet

Share of Mobile Deals Grows, Healthcare ShrinksShare of Angel Group Deals by Sector 2012 vs 2011

12