ANGELINVESTORSTAKEONNEWPERSONA–THATOFVENTURECAPITALS（一）.docVIP

WEEKLY INTELLIGENCE REPORT BY MIDA BOSTON (21 NOVEMBER – 25 NOVEMBER 2005) IN NEW ENGLAND, ANGEL INVESTORS TAKE ON NEW PERSONA – THAT OF VENTURE CAPITALS Before – Angel investors spent in the shadows of the investment world. Little was known about them, except that they tended to be wealthy individuals who might invest their personal saving in businesses that caught their fancy- everything from restaurants to widget companies. Now – Angel investors have emerged from the shadows, and are taking their place in the limelight, right alongside the one-time stars, venture capitalists. Angle investors have become an increasingly important source of financing to entrepreneurs seeking early-stage funding. Recently, the trend that angle investors registered themselves under much more organized angle groups. In New England, these organizations have a members successful entrepreneurs and other wealthy individuals who assess opportunities and often pool their funds for added impact on emerging companies mainly in the biotechnology start up and new emerging technologies companies. Angel investors are also emulating their venture capital brethren in negotiating tactics. Once referred to as “informal investors” because of their willingness to not tack on a lot of legal strings to their money, angels have become increasingly formal, seeking preferred stock, anti-dilution provisions, and clear criteria for sacking top executives, among other tactics of VCs. And whereas angels were once noted for one-shot investments, they are now increasingly providing follow-on financing. How can entrepreneurs take advantage of the new, more formal approach of angels? By positioning their companies as if they are seeking venture capital investing. Among the most important issues to emphasize to angels: Provide a clearly articulated value proposition, with an exit strategy in three to five years. With this should come a market-validated equity valuation and the opportunity for the angel investors