Tag Archives: New York Angels

The Facts on Deal Valuation and Structure

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Attention Entrepreneurs:  Investors at different stages have varied interests so you are likely to get different counsel from Big VCs, Big Accelerators, and other Big Shots.

I’ll keep this post brief and fact-based.  Early stage financing has supply and demand, and deal terms and valuation are determined by market factors.  When you determine valuation and deal structure for your company, consider the current data on Angel financing.

66% of Angel financings are done at a pre-money valuation of $4.5 million and under.60% of angel financing is done with Preferred Stock.

The source of this data is the Angel Capital Association’s new Angel Funders Report, dated August 2018 and released October 2018.  Drawn from 432 investment rounds in 2017 across 393 companies totaling $102 million invested.  Companies were located in 36 US States, Canada, and Israel.

So when you set your terms, the closer you can price your deal based on its merits relative to other angel deals getting funded, the faster your funding round will go, and the quicker you can get back to your business fundamentals.

New York Angels is the Most Active Angel Group in the USA in 2012

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Most Active Angel Groups 2012

New York Angels is the most active angel group in the USA according to the Halo Group’s 2012 Year in Review, based on number of investments.

Source:  The Halo Group, 2012 Year in Review

Ultra Light Startups, May 9, 2013

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Jason KleinBrad HarrisonRahul GandhiBrian Cohen

Join us at Ultra Light Startups:

Thursday, May 9, 2013 from 6:30 PM to 8:30 

Microsoft, 1290 6th Ave, New York, NY 10104

sign up at http://ultralightstartups.eventbrite.com/

Investor Panelists

Agenda

  • 6:30pm – Pizza, networking and introductions
  • 6:45pm – 8 startup pitches; investor panel provides actionable advice following each pitch
  • 8:15pm – The audience votes for the best startup; winners announced and prizes awarded
  • 8:30pm – Drinks at nearby location

Objectives

  • To help early stage startups refine their investor pitch
  • To provide actionable advice and feedback for each presenting startup
  • To provide insight on how investors evaluate startups and pitches
  • To award prizes to the most viable startups, based on audience voting

Hosts

Angel Valuation Survey

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The median valuation of tech companies funded pre-revenue is $2.75 million, according to a just released survey of angel groups from Gust. With the costs of starting a tech business falling, this means an entrepreneur can raise $500k and only give up 18% of his company to do so.  With the promise of revenue down the road, and no financial history on which to base a valuation, this seems reasonable.  Every company is of course different, but if an entrepreneur can conserve capital, he or she can retain a large share of the company.  Since I’m often asked about valuation, I’ve posted data from some of the larger angel groups below:

2012 Valuation Survey of Angel Groups  
Median pre-money valuation of pre-revenue companies
Software, Internet, Mobile and telecom deals
$ millions
All Groups:  Median 2.75  
All Groups:  Average 2.96
Selected groups:
Alliance of Angels (Seattle) 0.8
Atlanta Technology Angels 1.8
Robin Hood Ventures (Phila) 2
Vancouver Angels 2
Ohio TechAngels (Columbus) 2.45
New York Angels 2.45
Band of Angels (Silicon Valley) 2.75
Launchpad Angels (Boston) 2.75
Mid-Atlantic Angel Group (Phila) 3
Hub Angels (Boston) 3.13
Golden Seeds (NY, Boston, CA) 3.35
Sand Hill Angels (Silicon Valley) 3.5
Tech Coast Angels (So. CA) 3.6

The Decade of the Angel Investor

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Investor Paul Singh covers the common wisdom about angel investing.  Very sensible.  A good plan.  Hard to argue.  Let’s call it the base case…

  • “The takeaway for angels is you shouldn’t get into this asset class unless you’re willing to do 20 deals,” Singh said. “Do not get excited about any one company.”
  • “What I’m doing is going to the blackjack table, playing the minimum hand while I count the cards,” Singh said. “When I see a pattern I double down heavy.”
  • “Bad bets fail fast,” Singh said. “Smaller check sizes force companies to figure stuff out quickly.”

More here.