Venture Capital and Angel Investor Questions

Dallas VC and Angel Event - June 4 2009

info@InvestorQuestions.com (IQ) — Sat, 4 Jul 2009 03:57:43 GMT

Our next Dallas, TX Venture Capital and Angel Investor event will be on Thursday, June 4, 2009.

We will have 4 Angel Investor Groups and VC Funds participating:

John Filla, Angel Investor, Houston Angel Network
John C. Adler, General Partner, Silver Creek Ventures
Dan Klein, Director, Hunt Ventures
Ben Doherty, Angel Investor, The Fat Cat Club

Go to: http://www.fundingpost.com/breakfast/reg1.asp?event=154&refer=iq for more details and to register.

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NYC Venture and Angel event May 13

info@InvestorQuestions.com (IQ) — Sat, 4 Jul 2009 03:57:43 GMT

Our next early-stage VC and Angel event in NYC is on May 13, 2009 from 2-6pm!

Moderator:
John Hempill, Partner, Morrison & Foerster
Speakers:
Larry Chaityn, President, Keiretsu Forum NY
Owen Davis, Managing Director, NYC Seed
Matt Turck, Principal, Bloomberg Ventures
Charlie Federman, Angel Investor, Crossbar Capital
Kyle Harris, Managing Director, Liquidity Works, Inc.
Amish Jani, Managing Director, FirstMark Capital

The event is 50% filled already (as of 4/23).

Go to: http://www.fundingpost.com/breakfast/reg1.asp?event=155&refer=iq for more details and to register.

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Interview with 4 Investors -Listen anytime!

info@InvestorQuestions.com (IQ) — Sat, 4 Jul 2009 03:57:43 GMT

We recently interviewed 4 early-stage VCs and Angel Investors, who will be speaking at our November 3 and 4 conference in NYC.

It was a Live call with over 1000 people listening in. Investors on the call: Ron Thompson, Corporate Angels; Ross Goldstein, DFJ Gotham Ventures; John Filla, Houston Angel Network; Warren Haber, Jr., Crossbar Capital

More information on the Perfect Venture Conference in November with 50+ VCs and Angels: www.FundingPost.com/pvc

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Angel Capital

info@InvestorQuestions.com (IQ) — Sat, 4 Jul 2009 03:57:43 GMT

What is Angel Capital? How can I get a list of Angel Capital groups?

Angel capital is money given to a company by Angel Investors (wealthy individuals). This is not institutional money, rather money earned (usually) by former executives of companies or by other means. It's cash from their own bank account. Its often known as risk capital because of the high risk in giving it to start-up companies. In fact, from what Angel Investors tell me and the audience at my Venture and Angel Events, they typically expect 60%+ of the companies that they invest in to go out of business!! They only expect to actually Make a nice return from 10% of the companies they invest in! Hopefully this will be a nice enough return to balance out and make a profit on all of the money they invested.

Often Angel Investors group together and form Angel Groups. There are hundreds of these throughout the country. Here is a directory of Angel Groups:
Angel Group Directory

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VCs setting your valuation

info@InvestorQuestions.com (IQ) — Sat, 4 Jul 2009 03:57:43 GMT

In response to the FundingPost email for the event on June 5, 2008: The event will focus on best practices in raising capital.... how they determine your valuation.

This one caught my attention... you never let a VC tell you how to determine your valuation. Lol. It's like letting you home buyer tell you how much you should sell the house for!!

I notice the tone of this e-mail focuses on Entrepreneur sucking up to VC. I am an entrepreneur and the way I see it is, it's a privilege for VCs to invest in my company that i bust my chops to make it happen (and not the other way around).

VC and company's are partners in a single mission. Funding post should position it such a way. It's very immature to have entrepreneur who are the having to suck up to VCs. It doesn't have to be that way. It should be a place of gathering for two people with common goal to meet.

I dont think its about sucking up, but you Do need to impress the VC with your company. Positioning your pitch to make it out to be a "privilege" for the VC to invest doesn't often work....Unless you are a serial entrepreneur with large exits under your belt. Yes, you are busting your chops and working hard to grow your business, but if you need capital to grow, you need to impress the guy with the check book.

As for Valuation, yes, its a negotiation. You think its higher, they think its lower. So, how do they determine your valuation? Do they just take your word for it? probably not. They look at several factors, including the team, the technology, the market, what you have put into it (cash and sweat), competitors, how far along the company is, etc.... That mixed with a bit of their gut feeling is the number they come up with that they would buy in at. This is what they determine your valuation should be. Now, You dont have to take their money if you think they are valuing it too low, just as they certainly dont have to write you a check if they think you are valuing it too high.

When you buy your next house, I strongly recommend that you dont write a check for the listing price. Look at the other houses in the area, look at the quality of the house, the market, the schools, etc. and then make an offer of what you think the value of the house should be if you were to write a check.

Valuation is often a deal-killer. If the entrepreneur and the VC spend so much time negotiating this, it can be seen as a reflection of things to come. I often hear that getting rid of a business partner is harder than getting a divorce. You guys are in this for the long haul with a common goal. Its always in your benefit to understand how the VCs think, and what their expectations are right up front. Thats the goal of our events.

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