757 ANGELS Matching Talent and Smart Capital

Transcription

1 757 ANGELS Matching Talent and Smart Capital Summary 757 Angels, Inc. cnnects early stage businesses seeking capital with high net wrth investrs wh have an appetite fr early stage risk. 757 Angels is a clearinghuse fr presenting quality Hamptn Rads early stage investment pprtunities requiring funding generally in the $100,000 t $5,000,000 range t a brader base f "angel" investrs in rder t encurage successful new business grwth in Hamptn Rads. 757 Angels is managed by a Bard f Directrs cmprised f highly experienced entrepreneurs and prfessinals wh 1) understand the subjective challenges assciated with identifying prmising business mdels at an early stage, 2) assess the capabilities and ptential f a cmpany s management team, 3) determine a fair valuatin fr the cmpany, and 4) set ther investment terms that fairly allcate risk between the early stage cmpany and 757 Angels Members. Members f 757 Angels are successful accredited investrs wh seek the types f returns that are cmmensurate with the risk they assume in making investments in typically pre-ebitda psitive cmpanies with truly prmising financial mdels and strng management teams. 757 Angels seeks t de-mystify the cmplexity and imprve the efficiency f early stage investing t help ur regin (a) attract successful entrepreneurs wh learn f the sphisticatin and ready capital f ur grup, (b) retain its native intellectual talent wh might therwise see mre pprtunity elsewhere, (c) band tgether selflessly t increase the number f high paying careers thrughut the regin, and (d) enhance the business prspects generally f all the cities and cunties f Hamptn Rads and neighbring regins 757 Angels takes advantage f the deal flw directed by the brad spectrum f its Members and thers t find the best pprtunities t present t ur Members. Unlike many ther angel grups, ur Members chse individually whether t invest in a presented pprtunity and 757 Angels takes n carried interest in any deal. Members f 757 Angels becme expsed t pre-vetted investment pprtunities in early stage cmpanies that they likely wuld nt encunter were it nt fr ur grup. 757 Angels prvides mre than capital. Membership is abut much mre than attending meetings. The grup als prvides a frum t educate entrepreneurs and investrs wh actively exchange infrmatin and ideas regarding the frmatin, financial mdeling, develpment, and structuring f early stage cmpanies befre, during, and after the meetings. Nt all cmpanies that present will get the capital they seek; sme cmpanies wh are nt chsen fr meetings will be funded anyway by Members wh learn f them in the vetting prcess. All invlved will learn material lessns abut which mdels truly have prmise, and perhaps mre imprtantly, which dn t. Entrepreneurs win because they get assistance, perhaps capital, and learn a lt abut what their prspects really are relatively early in their life cycle s they can adapt r even abandn their plans if

2 necessary. Members win because they get access t prmising cmpanies lking fr capital n fair terms. The residents f Hamptn Rads win because 757 Angels enhances its well-deserved reputatin fr being a great place fr businesses t grw and fr businesses utside the area t relcate. Structure We have a Bard f Directrs ( Bard ) f experienced entrepreneurs and business leaders wh prvide high level supervisin t the vetting and selectin prcess. 757 Angels is staffed by a highly-experienced Executive Directr capable f vetting ptential investment pprtunities and selecting quality cmpanies t present t ur Members. The Executive Directr s wrk may be supplemented with free intern labr prvided by reginal clleges and universities. Hw D We Operate and Fund Our Operatins? 757 Angels peratins are funded by ur Members thrugh membership fees. We have three different classes f Members - Funders, Cntributing Members, and Supprting Members. T assure the sustainability f the rganizatin, Funders and Cntributing Members must cmmit peratinal funding thrugh the payment f membership fees fr three years f 757 Angels' peratins. The annual perating budget f 757 Angels is expected t be n mre than $250,000. Funders These individuals and business entities (public, private, r fundatins) cmmit t pay a membership fee f $5,000 each year fr three years. Entities with mre than 25 emplyees must be Funders. Business entities which are Funders must appint at least ne accredited investr as their representative. Funders are entitled t appint up t six representatives prvided that each representative is an accredited investr. Cntributing Members These individuals and entities will cmmit t pay at least $2,500 each year fr three years. Entities with 25 r fewer members may be Funders r Cntributing Members. Entities which are Cntributing Members must appint at least ne accredited investr as their representative. Cntributing Members are entitled t appint up t three representatives prvided that each representative is an accredited investr. Supprting Members Open t individuals nly, these leaders will pay $1,500 per year fr the pprtunity t attend each meeting fr that year. Each Supprting Member must be an accredited investr.

3 N Member r representative f a Member will ever be required t invest in an pprtunity unless they s elect. Hwever, each Member and each representative f a Member is expected t make at least ne (1) investment, in a cmpany presenting at 757 Angels Membership Meetings, ver a rlling three year perid. The membership fee is nt included in this ttal. Each Member must cmplete a membership applicatin. Each representative f a Member which is an entity, and each individual Member must als cnfirm their status as an accredited investr which will entitle them t register themselves n the GUST platfrm t assure access t the imprtant infrmatin that will be hused n that site. Any such individual is entitled t access the passwrd-prtected infrmatin cntained n the 757 Angels website/gust nce they have s registered. Upn receipt f a cmpleted applicatin, members will als be given access t the Angel Capital Assciatin (ACA) website. The ACA is a trade assciatin rich with educatinal and research resurces available at n extra charge t 757 Angel Members. Each Member and all representatives f business entity Members will be entitled t attend each meeting f 757 Angels. Members are encuraged t recmmend thers fr membership. 757 Angels has meetings at least three times per year t present tw r three qualified investment pprtunities at each event. Meetings will be held n the dates set by the Bard, but will never be held during the mnths f December, July r August. Meetings will begin arund 5:00 pm and refreshments will be available. During ur dinner meeting each cmpany will have 25 minutes t present and answer questins. Members f ur bard will then take Q&A fr an additinal 10 minutes after the cmpany leaves the rm. Meetings will end at apprximately 8:00 pm and will be fllwed by ccktails and a chance fr members t interact and discuss the presenting cmpanies. After each presentatin, 757 Angels Members will fill ut a detailed questinnaire intended t prvide bjective, annymus feedback t the presenting cmpany. This feedback will als be made available t the ther Members wh may be cnsidering making an investment in the cmpany. On the questinnaire, the Member will indicate if he r she is interested in investing and, if s, the Member will als indicate whether he r she wuld like t participate in a cmpany led cnference call r in persn meeting t learn mre. After a meeting, presenting cmpanies are prvided with a list f interested Members. Cmpanies are encuraged t cntact interested members directly. Members are invited t cntact the presenting cmpanies either individually r as a grup, directly r indirectly thrugh GUST. 757 Angels Members d nt vte as a grup n whether t make an investment in a selected cmpany. Instead Members will make their wn, individual investment decisins. Members and representatives f Members are required t abide by the 757 Angels Rules f Membership and Cde f Cnduct, a cpy f which will be prvided t each Member. Presenting cmpanies will be required t abide by their wn Cde f Cnduct.

4 Service prviders (law firms, accunting firms, marketing firms, and individuals wh are service prviders etc.) are permitted t becme Funders, Cntributing Members, r Supprting Members (individuals nly) but direct marketing effrts will be cnstrained by the Rules f Membership and Cde f Cnduct. Fr members interested in making investments less than the minimum investment amunt required by a presenting cmpany, members can pl smaller investments int an LLC. 757 Angels agrees t facilitate t creatin f the LLC if a minimum f $50,000 is attracted t the underlying deal. If the LLC attracts $50,000 the LLC will charge an annual fee f $1,500 split between LLC investrs n a prrata basis fr the first five years. In its sle discretin, the cmpany can determine whether it will accept LLC investment and the LLC will be subject t custmary LLC dcumentatin. Qualificatin Prcess 757 Angels wrks with the regin s gatekeepers (incubatrs, acceleratrs, accuntants, lawyers, etc.) as well as Members t build a strng flw f pprtunities t further vet and present t its Members. 757 Angels encurages early stage cmpanies t cntact the grup via the website. Our Executive Directr will then review all infrmatin submitted by early stage cmpanies thrugh GUST. The Bard f 757 Angels then decides which cmpanies t put thrugh the vetting prcess. A clear preference will be t chse businesses prviding the highest quality investment pprtunities t the members f 757 Angels. Ptential investments that are headquartered utside f Hamptn Rads may be evaluated. Hwever, assuming cmparable investment quality, a clear preference will be t chse businesses headquartered in Hamptn Rads fr presentatin t ur Members. Mrever, Hamptn Rads investment pprtunities must derive r expect t derive a significant prtin f their revenues frm custmers lcated utside f Hamptn Rads. While these criteria are nt designed t ignre the value f s-called lifestyle r turist-riented businesses, it is designed t better supprt an influx f dllars int the area (hence grwing ur ecnmy) rather than frm ne Hamptn Rads cmpany t anther. 757 Angels will vet ptential investment pprtunities t cnfirm basic strengths and weaknesses f the pprtunity acrss a structured set f criteria. After the initial review, the Executive Directr will recmmend a grup f cmpanies t the Bard. The Bard will then select the mst cmpelling pprtunities and select a multi-disciplinary diligence review grup frm the Bard and r Membership t then d a deeper dive n each cmpany with its management. Included in this deeper dive is a review f the type f ffering (equity r debt), the size f the ffering, the pre-mney valuatin implied by the ffer, and ther terms accmpanying the ffer. This prcess is meant t help management understand better what will be attractive t ptential investrs, and t generally help the management team make a mre successful presentatin t the grup shuld they be chsen. Cmpanies will be encuraged t tailr their fferings in simplified structures (such as straight equity r cnvertible ntes) that enable limited cst negtiatin fllwing the decisin by ne r mre Members t invest s the cmpany can retain as much f each dllar invested as pssible.

5 At the next Bard meeting, the diligence teams will discuss their findings and the Bard will select tw r three t present t the grup at its next meeting. Cmpanies initially recmmended t the Bard fr vetting by the Executive Directr (nt just thse ultimately selected t present at a meeting) will have their applicatin materials including an executive summary psted n the 757 Angels GUST passwrd prtected site s all members can review thse pprtunities at the earliest pssible time. This psting enables a brader array f cmpanies t begin t attract attentin frm Members, even if they are nt chsen t present at the next meeting. The Executive Directr and the vetting team will then help the selected teams prepare t present the pprtunity at the meeting Membership Ptential Members interested in jining r learning mre abut 757 Angels shuld cntact either Paul Hirschbiel at phirschbiel@edencapital.net, Jhn Paris at jparis@williamsmullen.cm, Paul DiNard at pdinard@wec-cpa.cm r Mnique Adams at mniqueadams@757angelsgrup..