Business Angels

Slide 1:

YARA CAMBRA RUFINO EOI Valencia BUSINESS ANGELS An alternative source of financing innovative projects

BUSINESS ANGELS 1. Introduction:

BUSINESS ANGELS 1. Introduction Do you have a business idea? Are you looking for investment? If you are an entrepreneur requiring funding to take your project to the next level, the Business Angels have the resources and networks to help you 2

BUSINESS ANGELS 2. Definition:

BUSINESS ANGELS 2. Definition Who are they? Individual investors , usually with business experience, who provide capital for start-up firms How invest? Invest their own money in high potential start-ups in exchange for a share in the company How they contribute? Financial support They get involved with the day-to- day running Their experience in business management Know how Their personal network of contacts Where? Often prefer to invest in their region of residence Source : EBAN ( European Business Angels Network) 3

BUSINESS ANGELS 3.- Business Angels and other finance sources:

Private Equity f unds BUSINESS ANGELS 3.- Business Angels and other finance sources Business Angels IPO Seed Start -up Early-growth Sustained growth Capital needs Time Lower risk Higher risk Angels help fill the ‘Equity Gap’ 4 Source : EBAN 4F (Founders, Friends,Family and Fools) Venture Capital funds

BUSINESS ANGELS 4.- What is the difference between Business Angels and Venture Capitalists?:

BUSINESS ANGELS 4.- What is the difference between Business Angels and Venture Capitalists? Funding source Business Angels (BA) Invest their own funds directly in a business Venture Capital (VC) Invest funds from other sources Stage of entrepreneur I nvest in seed, start-up and early-stage businesses I nvest in later-stage businesses (although there are exceptions) Size of investment €30.000 - €500.000 Higher investment size >€500.000 5 Motivation Philanthropic & return on exit within five-seven years Significant return on exit within five-ten years Source : WBAA ( World Business Angels Associations ), www.meteorical.co.uk Sources of Leads Angel networks, local networking with professionals and other companies VC directories ( ASCRI ), web searches

BUSINESS ANGELS 5.- When should I approach a Business Angel?:

BUSINESS ANGELS 5.- When should I approach a Business Angel? 6 Source : WBAA Your product is developed or near completion You have existing customers or potential customers You’ve invested your own euros and exhausted other alternatives You can demonstrate that the business is likely to grow rapidly Your business plan is in top shape

BUSINESS ANGELS 6.- Characteristics that Business Angels are seeking:

BUSINESS ANGELS 6.- Characteristics that Business Angels are seeking 7 Source : Paco Negre‘s speech in Forinvest (CEO of Nero Family) Good luck Management Team Innovative idea Business model Market Investment Exit

BUSINESS ANGELS 7.- Success rate:

BUSINESS ANGELS 7.- Success rate 8 Source : Paco Negre‘s speech in Forinvest (CEO of Nero Family) 1000 ideas 100 projects 10 companies 1 triumph

BUSINESS ANGELS 8.- About Angels Network (i):

BUSINESS ANGELS 8.- About Angels Network (i) Membership Business Angel investors Objective T o match entrepreneurs looking for equity with Business Angels Fees Annual membership fee and sometimes % success fee Operations Seeks & filters applications from entrepreneurs Allows selected entrepreneurs to pitch to investors P rovide training Entrepreneur Business Angel Opportunities to syndicate (many Angels investing together) 9 Source : EBAN Investment Readiness programmes Investor Readiness programmes

BUSINESS ANGELS 8.- About Angels Network (ii):

BUSINESS ANGELS 8.- About Angels Network (ii) Source : WBAA, EBAN, ESBAN, AEBAN and CVBAN WBAA World Business Angels Association Representatives from 5 continents and 11 different countries INTERNATIONAL EBAN European Business Angel Network 250 business angel networks in Europe 20.000 angels 40.000 business plans/ year EUROPE ESBAN Red Española de Business Angels SPAIN AEBAN Asociación Española de Business Angels CV BAN , Comunitat Valenciana Business Angels Network Portfolio: 37 firms 40 angels 70 projects analyzed €18m invested Potential investment : €33m VALENCIAN COMMUNITY 10

BUSINESS ANGELS 9.- Conclusions:

BUSINESS ANGELS 9.- Conclusions Business Angels are an important addition to available sources of finance Offer good added value for entrepreneurs and SME’s Business Angels market is growing in Europe, Spain and in Valencian Community P lays an important role for SMEs in terms of external finance Provide readiness support to entrepreneurs and Business Angels, facilitation of syndication, etc 11

Thanks for your attention!:

Thanks for your attention ! YARA CAMBRA RUFINO EOI Valencia