Download MEP Angel Network Kit - Missoula Economic Partnership

2501 Catlin Street | Suite 205 | Missoula, Montana 59801 | P: 406.541.6461 | F: 406.541.6464
THANK YOU FOR YOUR INTEREST IN FUNDING
THROUGH MEP ANGEL NETWORK.
MEP Angel Network is a group of local investors that aims to make meaningful capital
investments of between $250,000 and $750,000 in early stage companies with ties to
Missoula, Montana.
To be eligible, you must:
 Be in the startup, early stage or stage-two phase of development.
 Complete the required paperwork for the screening process through Missoula
Economic Partnership.
 Complete the required screening by MEP Angel Network’s Entrepreneur
Committee.
Companies selected to present to investors must:
 Upon selection pay a nominal fee of $250 to help cover associated costs.
 Participate in a two-hour presentation coaching session with the Entrepreneur
Committee.
 Deliver a presentation as specified in the MEP Angel Network application kit on
their scheduled day.
 Be prepared for investors to collectively or individually conduct due diligence on
finance, operations, market potential and more.
 Be ready to conduct negotiations on the requested amount and provide an
accounting for how that money will be used by the company.
This kit includes:
 Investment process overview.
 Scoring for applications.
 Angel funding application.
 Requirements and tips for in-person presentations.
If you have questions regarding the process or would like to become an investor,
please contact Brigitta Miranda-Freer at 406.541.6461.
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MEP ANGEL NETWORK
INVESTMENT PROCESS OVERVIEW
The priority for the MEP Angel Network is to invest significantly in innovative,
Missoula-based companies with a high likelihood of market success. We are looking
for early stage companies that we believe can make a strong impact on Missoula’s
economy, job outlook and business future.
Therefore, we take the vetting process seriously and screen all applications rigorously.
Only a small portion of applicants will be invited to present to network investors and
only a portion of presenters is likely to be funded.
Companies applying to the network are typically in their A or B investment rounds and
will have already secured $250,000 to $750,000 of investment from friends, family or
the ownership team itself.
If you plan to submit an application, we encourage you to connect with the Innovation
Initiative (at MonTEC), Missoula Economic Partnership or other advisors as you
prepare your application.
OUR STRUCTURE:
MEP Angel Network is not a fund and does not invest as an LLC or other entity.
Investors may collaborate on due diligence, but make individual investment decisions.
Individuals may choose to form a single-purpose LLC for investment outside the scope
of the network’s involvement. We hold up to four pitch sessions per year.
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MEP ANGEL NETWORK
INVESTMENT PROCESS
STEP ONE: Apply
Interested companies must complete the application provided with this kit along with an
executive summary not to exceed two pages in length, and provide a copy of their proposed
12-slide PowerPoint investor presentation. These must be submitted to the Missoula Economic
Partnership. Incomplete or improperly filled out submissions may be eliminated from
consideration.
STEP TWO: Review
Candidate applications are screened and scored by the Missoula Economic Partnership. Each
application is judged using the scoring sheet in this packet. Ultimately, up to six companies will
be recommended for a live Deal Screening session with the Entrepreneur Committee, which
consists of up to 10 network members.
STEP THREE: Deal Screening
Each company is given seven minutes to present to the committee, followed by an eight -minute
question and answer period. Presentations must be crisp, structured as requested (see Live
Presentation Requirements) and delivered professionally. At the end of the screening, the
Entrepreneur Committee recommends as many of the companies as it sees fit for presentation
to the full MEP Angel Network.
STEP FOUR: Full Network Presentation
Companies accepting an invitation to present to the full MEP Angel Network will be charged a
nominal fee of $250 to help cover the cost of managing the process. They will also be required
to participate in a two-hour presentation coaching session with the Entrepreneur Committee.
Following that, participants will present to the full MEP Angel Network (approximately 25
members and invited guests). Presentations are required to be no more than 15 minutes , with
an additional 10 minutes for questions and answers. After each presentation, the entrepreneur
is excused. Investors discuss the opportunity and may choose to pursue due diligence with that
company.
STEP FIVE: Due Diligence
Companies with investor interest then enter into a due diligence phase with those investors.
Typically, the company will set a conference call or meeting in its office seven to 10 days after
the presentation. It is common for one or two network investors to take the lead in due diligence
and negotiations with the company.
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MEP ANGEL NETWORK
APPLICATION SCORING SHEET
The following criteria will be used to score your application only.
MEP Angel Network Screening Score Sheet
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MEP ANGEL NETWORK
ANGEL FUNDING APPLICATION
Company name:
Presenter’s name:
Address:
Title:
Date founded:
Office #:
Number of employees:
Full time:
Part time:
Cell #:
Email:
Website:
Brief company description:
Please describe your company’s characteristics in terms of the following:
1. Marketing / Space Clear problem? Clear pain? Barriers to entry? Competition?
2. Execution Plan Defensible IP? Solid revenue driver? Scalability?
3. Traction Customer satisfaction? Sales approach? Sales cycle? Sales pipeline?
4. Revenue Potential Pricing model? Pricing changes over time?
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5. Profitability Current burn rate per month? $
Revenue
Year
Description
2010
Actual
2011
Actual
2011
Forecast
2012
Forecast
2013
Forecast
Revenue
COGS
Gross Profit
Expenses
EBITDA
6. Management Team Relevant experience? Track record? Complete team?
7. Board & Advisors Relevant experience.
8. ROI Potential risk and opportunities?
9. Investment Required Round? Proposed deal structure?
10. Valuation Information What is the aggregate dollar amount of capital invested into
the company to date?
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Funding History
Source of
capital
Date of
investment
Series
Number of
equity shares
issued
Class of
equity shares
issued
Number of
shares
outstanding
Post-money
valuation for
each funding
Are previous investors participating in this round?
Use of the funds raised in this round:
Pre-money Valuation: $
1. The basis and empirical data (if any) that is supportive of the pre-money valuation; i.e.,
show market data, financial models, calculations that are the basis for the value just
prior to the latest capital investment.
2. Describe similar companies that you used as benchmarks for the liquidity event that
demonstrates their multiple of return or internal rate of return (“IRR”) on their investment
in your company at this funding round.
3. Show the market stock price or acquisition multiples for each company described in
number 2.
4. In addition to the multiple (such as 3 times revenue or 7 times EBITDA), show the dollar
amount of the earnings and revenue for each of the benchmark companies at the time
they were priced in the market. For acquisitions, the form of payment (description of the
consideration; cash, stock, debt, etc.) paid by the buyer to the sellers in exchange for
the target company must be detailed.
5. If financial models (such as a discounted cash flow analysis) were used to value your
underlying revenue growth, profit margins, projected working capital needs and capital
expenditure expectations, then the basis for discount rate used to present value future
cash flow streams must be shown, with a meaningful explanation. An unfounded
assertion pertaining to an input to the model will not be considered fulfillment of this
requirement because network investors must receive a comprehensive rationale from
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presenters to make informed investment decisions.
11. Exit Strategy
12. Resources Needed Beyond Capital Introductions to customers, distribution channels.
13. Executive Summary Include two-page executive summary.
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MEP ANGEL NETWORK
LIVE PRESENTATION REQUIREMENTS
You will be allowed seven minutes for presenting during the deal screening, followed
by eight minutes of questions and answers. Final presentations to investors are 15
minutes, followed by 10 minutes of questions and answers.
To ensure you cover all necessary information, you are required to structure your
slides as follows.
1. Title slide – Company, contact information, logo, presenter name.
2. Customer situation (1-2 slides) – What is the problem?
What problem are customers avoiding?
3. The Product / Solution (1-2 slides)
a. Solution scalability – ability to serve.
b. One large customer vs. many small customers.
c. Core Tech/I.P. and barriers to entry for competitors.
d. (Key mistake – tell too much; too much jargon.)
4. Value proposition for customer (1 slide).
5. Initial target segment and total market (1 slide).
6. Marketing strategy (1 slide).
7. Sales strategy (1 slide).
8. Product strategy (1 slide).
9. Management and board (1 slide).
10. Financials – current and projections (1 slide).
11. Investment required (1 slide).
12. Recap (1 slide).
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MORE ON PRESENTING:
 Follow the above format exactly: Investors are looking for very specific content
in presentations. Clearly presenting that content in the order indicated will
ensure the best opportunity to be funded.
 Emphasize the right content: Your product or service is important to investors.
However, you would not be presenting to the full network if we felt your idea was
unmarketable. Therefore, we highly recommend you focus your time on slides
seven through 11. You don’t want to find yourself rushing at the end because
you spent too much time on the first slides.
 Avoid putting too much information on slides: Clear, clean, concise slides
communicate well in a short period of time.
 Do not read your slides verbatim: Show you have a mastery of your story and
the most vital information by using slides as emphasis, not as a crutch.
 Seek assistance: We strongly encourage presenters to practice thoroughly and
know the material well. Presenters may gain pre-pitch guidance through
seminars or one-on-ones available from the Innovation Initiative or the Missoula
Economic Partnership.
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