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MenuWhat do terms of a $100k Angel Deal look like?
For example, say I'm looking for 100k & have nothing more than an idea and a great business action plan. What kind of deal is an Angel looking for?
Answers
The terms are based on how an Angel investor views your company as well as your startup’s value in the market. So they are looking at your impact potential within your sector and industry, the size of any recent exits, the willingness to enter into a deal, and vice versa for the entrepreneur.
Especially in niche markets that you believe in (hardware & crypto, for example). If you know someone well enough you might get access with $50k–$100k, which is what you would put on 2–3 deals anyway. They’re going to do a better job than you do (although I’m not saying they’ll provide a great return…
Call me for more info...
🤔What Do REAL Terms of a $100k USD Angel Deal Look Like❓
🔷1) Mentality
We're often uneducated, ignorant & or skeptical of the people, companies & or organizations that have access to the information we need.
Learn as quickly as possible by failing faster & pivoting your mindset towards long-term growth instead of short-term stability.
🔷2) Valuation
We're often uneducated, ignorant & or skeptical of how REAL businesses are valued in the marketplace, let's look at asset based valuations for simplicity:
✅Assets (cash flow, improve your balance sheet before you get contacted by sponsors or investors)
✅Ratio (analyzing your company's price to sales ratio)
P = Current Share Price of Company
E = One Year's Worth of Earnings
P/E
P = (insert value multiplier) x E
For example:
P = 10 x E
✅ Discounted Cash Flow
What is your company's income (earnings & cash flow) projected looking into the future, then you create the discount rate based on the difference between future projections & current income (earnings & cash flow).
🔷3) Management
✅Best Practices
✅Systems (Soft Systems & Hard Systems)
✅Processes
Angels funding ventures are always looking for the return of their investment, how you provide this return is a process called...
💸A Fundable Strategy™😎
✅ Mission Statement (Personal & Company Missions Included)
🗨 Why are we in existence, what can we help the world achieve through meaningful collaboration?
✅ Vision Statement
💭 Core Values
✅ 5 Year Goals
✅ SWOT Analysis (viewed at present time but also reflecting new goals & strengths)
💭 Weaknesses
🗨 Opportunities
💭 Threats
✅ The GSWOT Table
✅ Strategic Initiatives (these are what groups work with)
🔷Measurable Objectives & Outcomes:
✅A set of high-performance & strategic goals & initiatives for the upcoming year, through five or more years out...
✅ The leadership team, mandate, & commitment is strengthened
✅ A clearly articulated direction that will be consistently shared with all staff
✅ A commitment towards ongoing bi-weekly appointments to reinforce the progress of strategic issues & examine issues, if necessary, associated with the strategic initiatives
🔷Strategic Planning Session:
✅ Vision
✅ Mission
✅ Strategy
✅ Action Plan
🔷 A Mission Statement:
Articulation of the purpose of the company, basically why it exists, what it does & for whom. It should serve as an ongoing guide that spells out what the company is all about. The mission should focus on the here & now.
🔷 A Vison Statement:
Outlining the goals & aspirations for the future. It creates a mental picture of a specific medium-term target & should be as a source of inspiration.
Thank you for sharing your question with us, I appreciate your hypothetical role-playing skills with only an idea & great business action plan!
🤔Would you be open to a call for follow up questions with me?
🏅CLICK the Link BELOW for your FREE Discovery Session:
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How much equity is typically taken by investors in a seed round?
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What exit strategies do angel investors want/prefer for a service business?
Keep in mind that investors invest for returns. Telling a prospective investor that you want his or her money to grow your business but don't plan on ever generating a liquidation event that pays him or her a dividend is not likely going to work; angel or not. You may be better served with debt financing where returns are generated in the form of interest payments not equity value growth. BUT, if equity financing is the plan, you're going to want to develop a strategic exit plan right from the start. That means identifying prospective buyers, strategic channels etc and characterizing the value drivers for each right up front. You'll find prospective buyers come in a number of forms; competitors, bigger versions of you, strategic partners, private equity, etc. Each will value your business in different amounts for for different reasons. Understanding this is vitally important for you to navigate to securing the right money, from the right sources, with the most favorable terms. Once you've qualified and quantified each of them, then determine what (specifically) you're going to need to do to align your business with those prospective buyers generating the highest returns. This will drive your business model and go to market strategy and define your 'use of funds' decisions. This in turn result in a better, more valuable business whether you exit or not. Do it this way and you'll have no trouble raising money from multiple sources. You can learn more about the advantage of starting with a Strategic Exit plan here: http://www.zerolimitsventures.com/cadredc Good luck. SteveSL
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Where can I find programmers willing to join a growing mobile start up for equity only?
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Among platforms for startup funding, AngelList is the 800 pound gorilla. Does it make sense to use simultaneously other platforms like Gust, etc?
Short answer: Of course! Many angel groups require you to submit through Gust because it offers a consistency and makes reviewing applications easier. But not all use Gust same as not all use AngelList... I haven't met an angel who frowns upon using multiple platforms. I would encourage you to leverage your twitter and Facebook or Instagram to meet angels and get in their radar (don't hassle or stalk) just try to get exposed a bit to them by being part of the same meetup group, follow the same blog, membership... Subscribe to their own blog.. And when you submit funding request considerations do please send a follow up email or a call or basket of fruits if you have contact them before.HV
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