Angel InvestingPresented by Roger LondonAmerican Security Challenge

Background

$1B

Serial Entrepreneur #6?

Dept of Defense and Intelligence Community Tech Scout

Dingman Angels, Baltimore Angels

Startup America/NYSE, Wal-Mart, GE, Coca-Cola

NOKIA Venture Capital

Techstars mentor and partner

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Fundamentals?

Ignore Cus-tomers Poor Product Not Right Team No Market

Need

00.05

0.10.15

0.20.25

0.30.35

0.40.45

0.5

14%17%

23%

42%

Startup Failure Not Right Team

Poor Product

No Market Need

Ignore Customers

Top 4 Reasons Startups Fail

Red Flags

1. Market share based on % of total market2. FF&F terms not angel friendly3. Use of Proceeds pays salaries or debt4. Send unsolicited plans5. No competition6. NDAs7. Polishing the cannonball8. Bury the headline9. Relatives/friends on team10. Muddy IP

Soooo, what should you do?

1. Clearly defined benefits and differentiation in scalable business2. Get customers pilots/traction/involvement early*3. Show exit possible4. How are you going to make money!5. Traunche milestones6. Team examples of success7. Valuation 8. Clear, concise and compelling- 6th grader *9. Forget crowdfunding10. Profitable, repeatable, sustainable, scalable

Startups Hurdles Race Theorem

1. Distance: How long is the race…100 meters or mile? Is start to exit in 5 years or 15?

2. Number of Hurdles: is this a 3 hurdle race or 10 hurdle race where hurdles include factors like raising capital, finding talent, raising capital, creating demand in new market, manufacturing, raising capital, distribution, etc.

3. Hurdle height: are these hurdles easily crossed? Need 100 customers or 1M to break even?

4. Purse: playing for pile of pennies or pot of gold?

Bonus: from Driven Forward

1. Dumb money2. Kiss of death advisor3. Misspent effort4. King of the dung hill5. Build to buzz ratio6. Seem uncoachable

Bonus: from Driven Forward

• Mark Cuban ‘s 12 Rules for Startups: • Sales cures all

• Jeff Bezos: • ‘What’s not going to change in the next 10 years?

• Heidi Roizen:• the art of negotiation is finding the maximal intersection of mutual need

• Roger London• Investor decision making: Bus Theory

• Roger London:• Pattern recognition

Roger London, PresidentS3 Innovations

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