The National Council of Entrepreneurial Tech Transfer Kent State University College of Business Administration Creating a University Angel Group

to Fund Your Student, Faculty, Researcher and Alumni Startups AGENDA

I. What is angel investing? II. What is an angel network vs. angel fund? III. How does a university benefit by creating an angel network for their startup ecosystem? a. What does an angel network do and how does it operate b. How do angel networks assist students understand entrepreneurship and startups c. What are the academic benefits of having an angel network IV. How to set up a university-based angel network? a. How do you find a champion to lead the process of creating a network? b. Establishing affiliated alumni mentor network to work with the university angel network c. Establishing affiliated business/technology adviser network to work on proof-of-concepts and startup development V. What can NCET2 do to help you set-up your own angel network? TONY STANCO Executive Director National Council of Entrepreneurial Tech Transfer (NCET2) I. What is Angel Investing? What is an Angel Investor?

WHAT IS AN ACCREDITED INVESTOR? • a natural person who has individual net worth, or joint net worth with the person's spouse, that exceeds $1 million; or • a natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 Angels Drive Most Startup Funding

• Angels deploy own funds and make own investment choices • Approximately 200,000-300,000 active angel investors ANGELS FUND MAJORITY OF STARTUPS

Angel Investors Venture Capital • $24.6 billion • $59.1 billion* • 71,000 deals • 4,380 deals • 17,750 seed • 186 seed • 31,950 early stage • 2,219 early stage • 305,000 individuals • 718 active firms • $2.6M Average Seed/Early Stage • $5.1M Average Seed/Early Pre-Money Valuation Stage Pre-Money Valuation • $347K Average Investment per • $13.6M Average Investment per deal (all deal sizes) deal (all deal sizes) Sources: “Angel Investing Market for 2015, Center for Venture Research/ UNH; NVCA 2016 Yearbook; PwC MoneyTree PROFILE OF ANGEL INVESTORS • Years investing 9 • Number of investments 10 • Years as entrepreneur 14.5 • Number ventures founded 2.7 • Percent of wealth in angel investing 10% • Education Masters degree • Other backgrounds: corporate leaders, professional services

Source: Returns of Angels In Groups, Robert Wiltbank, Willamette University, published by Kauffman Foundation - 2007 2015 Share of Angel Group Deals by Region

Source: Angel Capital Association ANGEL GROUPS VARY BY NUMBER OF INVESTORS

Source: ACA Member Group Survey, March 2015 …AND ALSO IN DEAL ACTIVITY Number of Investments Per Group in 2014 40% 35% 30% 25% 20% 15% 10% 5% 0% Less than 5 6 to 10 11 to 15 16 to 20 21 to 30 More than 30

Average = 10.3 Deals per group Median = 7.0 Highest = 61 Source: ACA Member Group Survey, March 2015 -103 groups reporting University Angel Groups Are Different • University angels are more hands-on, more mentoring, come in earlier, try to help university and students • Traditional ones act like VCs i.e. come in later • SBIR ---- University Angels – Fund the Valley of Death ROBERT D. HISRICH, PH.D. Bridgestone Professor of International Marketing and Associate Dean of Graduate and International Programs at College of Business Kent State University II. What is an angel network vs. angel fund? Definitions

• Angel group • Angel fund • Angel network III. How does a university benefit by creating an angel network for their startup ecosystem? Benefits of University Angel Networks • Provide education for students and faculty • Student training and experiential education • Create, develop, and fund startups at the university • Serve as mentors for these startups • Bringing high net worth individuals to the university • Assist in economic development in the region – Invest in local companies to increase economic development in the area ANGELS FUND HIGH-GROWTH COMPANIES

Number of Employees One Year After ACA Member Investment

30%

25% Average = 41.4 Median = 17.5 20%

15%

10%

5%

0% 2 to 5 6 to 10 11 to 20 21 to 50 51 to 100 100 plus Source: ACA research on member investments, March 2015 …and startups create the most net jobs

Source: Business Dynamic Statistics Briefing: Jobs Created from Business Startups in the United States. Kauffman Foundation, January 2009 High-Growth Firms Build Jobs After Startup

Source: High-Growth Firms and the Future of the American Economy, Kauffman Foundation, 2010 IV. How to set up a university- based angel network? Setting up a University Angel Network • Find a champion at the university • Recruit angels to the network • Set-up a typical meeting schedule Example of a Typical meeting

• 30 min education • Dinner/drinks • 4 company presentation • Out by 9pm V. What can NCET2 do to help you set-up your own angel network? NCET2 Approach to Establishing an Angel Group Network • Assist in setting up a university angel network • Assist in recruiting angels into the network – NCET2 Demo Day has angels to include in local groups • Assist in establishing deal flow and the evaluation process • Assist in developing marketing materials • Assist in developing mentoring program • Materials provided: – Deal screening materials – Business plan format – Computer mentoring program • 10% co-investment of the American-Chinese University Growth Fund (financial investors only, no access to management and IP, companies stay in US) For more/follow-up information about setting up your own university angel group

Contact Ria at NCET2 [email protected] The National Council of Entrepreneurial Tech Transfer Kent State University College of Business Administration Creating a University Angel Group

to Fund Your Student, Faculty, Researcher and Alumni Startups