RedlenVEFSept24Final

Chasing Angels : Chasing Angels Glenn K. Bindley President & CEO Sept 2004


What Does Redlen Do? : What Does Redlen Do? Our Mission: To be the world’s leading provider of semiconductor radiation detection and imaging solutions We’re developing a new high yield semiconductor manufacturing process to enable widespread adoption of digital radiation detection Equivalent transition in Visible Radiation Systems


Our Market & Product : Our Market & Product $>15B / Year End Application $>1B / Year Incumbent Solution Our Product Semiconductor Radiation Detector


Some History… : Some History… 2000/2001 was a good time to raise Angel money Lots of newfound wealth Prior relationships matter Age of the napkin-based business plan What’s Due Diligence?


Fundraising History : Fundraising History Angel only Equity Rounds 2000, 2001, 2002 Mixed Angel + VC round 2004 VC Term sheets declined by BOD Yaletown agreed to participate on Angel terms


Angel Advantages : Angel Advantages Angels fly fast No fiduciary responsibilities means no 6” Due Diligence binder, faster time to close Angels fly economy Low overhead passed on to you, lower IRR on their $$ than VC $$ 30 pages Vs 30 inches of legals Angels are low maintenance Simpler ongoing reporting


Angel Attributes : Angel Attributes Angels run in packs Getting the first one onboard is key to success It’s generally multiple or none Name dropping helps The right Angel can add huge value But generally doesn’t have the time to do so; it’s a hobby, not a job If you can find a good one with domain expertise – find ANY way to get him involved (BOD, TAB, etc) Friend & Foe of the VC Provides validation of the enterprise Competitive valuation implications (more later)


Angels Then and Now : Angels Then and Now


How Much From Who? : How Much From Who? Individual Angel Group of Angels Individual Early Stage VC Individual VC/Syndicate Angel Territory Where Angels Fear to Tread Your $ Your Own $


Strategic Implications : Strategic Implications Current funding determines next funding VC led seed round means Angels likely to play minor role Angel dominated seed round can mean limited opportunity for VC’s in next round Best next round terms come from current investors The venture community punishes predecessors (if they can) Angels NOT always the farm team write another check Vs down round Angel Vs VC boards – the lesser of two evils? Angel: lack of time / loss of interest (benign neglect) VC: indecision / control without knowledge All good ideas are NOT VC fundable Angels may be one of your only options Market TAM/5 year revenues too small Insufficient proprietary IP


Getting Angel $$ : Getting Angel $$ Have a concise pitch And a detailed plan if they bite Have a signature ready Term Sheet Market priced & ready to close You’re the one setting Terms Get SBVC credits lined up early Focus on getting the first commitment Watch for entrepreneurs that have had a recent liquidity event


Summary : Summary Angels can be faster, cheaper way of raising moderate $$ But get the $$ wherever you can. Consider the strategic implications of your seed funding source Think at least one round ahead and plan accordingly Don’t miss any opportunities for government $$ SRED, IRAP, SBVC, TPC, etc They ARE open to non-Quebec companies