Angel investors rely on “exits” – essentially someone buying the company in which they have invested (in a liquidation event) – to make money.This can be a surprise for people investing in public markets, where exits are as easy as hitting “sell.” They are critical to...
If your company passes the barriers in our “definitely won’t fund” and “almost definitely won’t fund” posts last week, we hope you reach out to connect with us. We also think you would benefit from the upcoming “how to pitch” workshops that we are running in Columbia...
Continuing the last post, here are some business characteristics we almost definitely won’t fund.Pharma (and medical devices)If your business requires ten years, hundreds of millions in total funding, approval from the FDA, clinical trials, etc. we are very unlikely...
We have a guide to the kinds of investments VentureSouth groups make in our “For Entrepreneurs” section. Even so, every day we receive an email with an investment proposal that clearly does not fit our criteria.So I thought it might be useful to add what we will not...
What is “participation”?One last complication about liquidation preferences. A liquidation preference may, or may not, be “participating.”What does this mean?If the preference is participating, the preferred shareholder takes its preferred return (the 1x liquidation...
The next question is “how much preference” do preferred equity shareholders usually get?The basic answer is “a one x liquidation preference” – or 1x.What does that mean?Liquidation preferences are phrased as multiples of the amount invested. So 1x means one times the...
On the previous post, we said the “preference” is relevant at a “liquidation event.” What does that mean?A liquidation event covers various scenarios through which the shareholders in a company get “paid out.” It covers both good situations and...
What is preferred equity?Angels invest in “convertible preferred equity” rounds.What does this mean?1) Equity: equity simply means a share in the company. Angels buy a piece of a company; they don't lend money to...
Back to basics seriesOne of the beauties of angel groups is that they bring together people from all different backgrounds – business-people (from large corporate, owner-operators, startup entrepreneurs), academics, doctors, young, old, native Carolinians or...
I just did my first "Crowdrcast". It was a lot of fun!Our SCAN angel groups have seen pitches from over 230 companies, and have reviewed the business plans, executive summaries, and pitch decks of probably 2,000 more. We've seen a lot of pitches - the good, the bad,...