Published on January 20, 2009
MOVING BEYOND THE FIRST DATE… © 2009 North Venture Partners, LLC | www.dontgosouth.com | www.northangels.com
1.0 Taking a new path can sometimes be incredibly lonely. On your marks, get set, hold on… If you’re reading this, that means we’re interested in taking the next step towards making your venture a success story. But before we decide to move in together, exchange vows, and live happily ever after, we’ve still got work to do. The process of raising capital in the private equity market can often be misunderstood. So to help familiarize you with our process, and what teaming up with us might be like, we first want you to to understand a bit more about how we work.
We’re Actually On The Same Team. Like most Angel investment groups we do not manage a fund. We provide our investor members with a service, which at the most basic level, is a filter for sifting through thousands of investment opportunities. Contrary to popular belief, we don’t just write checks like a VC. We (the group managers) usually have to work twice as hard to get all the parties around the table excited to work together. This means that we are in this together. We are both going to work towards the same goal; getting your venture funded. 2.0 Investors expect us to make it easy for them to make an informed and intelligent investment decision. It’s our job to make investing more educated, empowering, and rewarding. Ready to team up? Is our job easy? Hardly. Managing a group of successful, critically-thinking high net worth investors is no walk in the park. To wage this war we’ve armed ourselves with the best possible processes and tools to enable us to be highly effective at giving your venture significant traction. To get where we need to go, we’re going to have to work closely together. This isn’t a game show, and the photo ops with a giant check are rare. But one thing’s for sure, the coaching and feedback you’ll experience will be unrivaled.
How Can You Stand Out From The Crowd? Most Angel groups are buried in submissions from entrepreneurs who have “remarkable products, stellar financials, and a world-class management team”. Or at least that is what their business plan would say if they had the chance to read it. More often than not, the business plan gets only a quick look. 3.0 The truth is most investors simply can’t take the time to read thousands of business plans. So you’ll have to put together a strategy to get your business plan noticed. That’s where we come in. Do the math: Right now there are over 37,000 business plans on AngelSoft. There are over 100,000 plans on FundingPost. There are over 6,000 plans on Funding Universe. If an Angel investor tried to review all these plans for 30 minutes each it would take over 33 years reading 8 hours a day, 5 days a week, for 52 weeks a year. Bottom line: Blasting your business plan out to several hundred Angel groups isn’t effective unless you can get past the first glance test. Don’t worry, we can help get you a second look. It’s not rocket science, its just basic branding.
It’s Time To Break Free From The Broken. Before the internet, entire industries emerged that helped investors find “good” entrepreneurs; trade shows, print publications, and an army of investment banking connectors who helped introduce entrepreneurs to investors (for a large percentage of your company of course). You can spend half your career (and life savings) at trade shows and more often than not all you would have to show for it would be a desk drawer full of name badges. 4.0 Today’s investors rely more than ever on their filter of trusted referrals and connections with friends. Creating relationships with investors is hard work, and it’s going to take time. This traditional process needed to evolve, not because it wasn’t an effective method for discovering a high number of venture investments, but because investors needed an easier way to reduce their number of investment options down to a more manageable and quality figure. Working on your business with investors requires you to invest time, energy and effort. The good news is we’ve got an all-star roster of players and resources that can help fill in the gaps and set your venture free; keeping it moving in the right direction
There Is A Smarter Way To Find Capital. While we have to admit there is an intoxicating rush from pitching your innovative venture in front of an audience, the end result usually feels more like a hangover. Investors with more questions than answers, and entrepreneurs leaving wondering if their choice of wardrobe sealed the fate of their company. 5.0 True understanding of a venture doesn’t happen during a 15 minute pitch in a hotel ballroom. The quality of time you spend is far more important than simply pressing a card into the hand of a random investor. We know that this process can be frustrating. If you feel like you’re wandering down the beach looking for buried treasure, you aren’t alone. Raising capital is challenging and the success rate for “strong” companies is well under 10%. Don’t get discouraged, having faith in your vision, your business, and your abilities is what sets you apart from the other 90%. While we can work on positioning your business in a way that can enable you to have the greatest possible chances at funding, we’re not guaranteeing anything. If this were easy, everyone would do it.
Seeing Your Venture Through Investors Eyes. One thing we’ve learned is that in order to get stronger you have to be willing to address your weaknesses. This is your warning, nobody likes to look at their deficiencies. Working on your soft spots is hard, but in order to reach your goals you’ll have to dig deep and grind it out. 6.0 From deconstructing the financials to target market analysis; the strengths and weaknesses of each venture opportunity are reviewed in detail so investors and entrepreneurs can make a confident assessment based on reliable data, not just intuition. 20+ Pages of Rigorous Insights & Scoring Comparative Graphing & Performance Chart & Venture Analysis Across 8 Categories Written Analysis Executive Summary
A Long Hard Look Pays Off For Everyone. Ultimately investors and entrepreneurs are betting on the same thing: the success of the business. A three year study of 539 Angel led investments conducted by the Kauffman Foundation found an extraordinary insight. 7.0 “Comparing investors who spent less than the median 20 hours of due diligence and investors who spent more, shows an overall multiple difference of 5.9X for those with high due diligence compared to only 1.1X for those with low due diligence.” Excerpt taken from “Returns to Angel Investors in Groups”, a comprehensive study of 539 Angel led investments. Robert Wiltbank, Ph.D. and Warren Boeker, Ph. D., 11/2007. Whether you’re an entrepreneur betting your career, or an investor betting your capital on an exciting new venture, what type of return on investment are you seeking? 590% or 110%? If a venture doesn’t succeed nobody wins, so it’s in all of our best interest to stress test the business well before we start running full speed. The good news is digging into your business and finding the specific points that need extra attention arms you with a plan to move forward with clarity and conviction.
Pointing You On The Right Path to Funding. North’s objective analysis and contextual scoring of thousands of new ventures is the foundation of our program. It’s what makes us different. It’s what makes us better. It’s our secret 11 herbs & spices. But the Venture 360 Report is only the first step in building momentum and helping you achieve your goals. 8.0 Upon completion of the program, the top scoring Venture 360 Reports are published to individual investors, other Angel groups, and institutional investors. “DealBase.com truly enjoyed working with North Venture Partners. Their Venture 360 report is proving to be beneficial to our fundraising process by giving prospective investors an unbiased and impartial analysis of our business. The process itself was quick and painless, and the resulting report and associated discussions with the North team included some highly valuable insights and feedback on our business plan – an unexpected, and greatly appreciated benefit.” - Sam Shank, CEO, DealBase.com
A Buzzer Beater Comes With A Lot Of Sweat. We truly believe that success comes through hard work and persistence, this takes time, and together we can help achieve your goals. 10.0 Michael Jordan was once cut from his high school basketball team. Sometimes setbacks prepare us to reach even greater heights. We all know where His Airness ended up. Do you know how you will respond to the challenges that your business will face? Each recipient of a completed Venture 360 Report has the option to take the insights provided and use them to constructively improve their business model, or perhaps their presentation materials. While not every venture will need it, this feedback can often identify key points of risk that are likely investor objections. This ultimately empowers the entrepreneur to create strategies for addressing and mitigating these risks. North can re-score ventures after a 90 day “cooling off” period to measure development progress and the revised strategy or structure which can be a huge benefit to the rapidly changing dynamics of the early stage business.
Time To Put Some Skin In The Game. By now you should hopefully understand what it takes to team up with North and go through our process. It requires commitment, perseverance, and above all, takes faith in your abilities and the strength of your idea. Nothing 11.0 worthwhile is ever easy. We think of the Venture 360 Report as the best possible way to move your venture forward. For North Angels, this is the only way. The Reasons for Going North: Build a long term relationship with North Venture Partners. Access to investment capital though our Angel partners and investment group. Presentation skills coaching. Venture 360 Report – a full venture analysis Invitations to private events and investor mentorship roundtables Strategic business development and fundraising advice. Educational materials, programs, and resources. Access to North’s network of strategic partners
Chances Are We’ve Got You Covered. While our roster is deep, we can’t provide value on every venture under the sun. If a venture falls outside of our coverage areas of expertise, we’ll probably have to wave the white flag and refer you to a partner for further assistance. 12.0 Creating a bond between entrepreneurs and a diverse group of Angels forms the foundation for fostering innovation. Our breadth enables North to accelerate ventures across 7 major market sectors. For each industry there are various North Market Coverage economic models, industry standards, and Media & Entertainment consumer behaviors. Each of these unique factors is incorporated into the venture Consumer Products & Services evaluation. The strength and accuracy of the North database of reviewed ventures is Software & IT Services enhanced by our market segmentation. Mobile Devices & Applications Note: The overall Venture 360 Report Business Products & Services scoring and analysis output is calibrated to seek the greatest possible economic return Retail / Distribution regardless of market sector. Sustainable Industries / Energy
Ready to Head In The Right Direction? We invest significantly in the ventures we team up with, and the last thing we ever want is a partnership of inequality. 13.0 We believe our time and effort must be something you value enough to invest in moving our partnership forward. A North engagement may carry some costs depending upon which services and resources you choose to retain. Engagements with our team run from a few hundred dollars up to several thousands dollars. Whether you choose to work with North or another third party, do yourself a favor and first try to determine who can provide you with the most constructive value back for your time and budget. What you need to break through more than anything is access to an experienced and transparent team that can accelerate your vision. Period. To engage with North and take the next step forward, send an email to firstname.lastname@example.org stating that you’re ready to rock and we’ll set up a time to talk. Read more about what we do at: Northern California Southern California www.dontgosouth.com 1729 Telegraph Ave Oakland, CA 94612 4316 Melrose Ave. Los Angeles, CA 90029
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