Angel investing david rose pdf

Article About A Company From Startup To IPO

From startup to IPO. You will pick one company that has gone public (or about to gopublic) over the past five years and analyze its trajectory from startup to IPO. An in-depthanalysis of their funding rounds, valuation timeline, ownership (cap table), investor profiles,investor pitches, other factors will need to be discussed. You should also be prepared toevaluate the company’s investment decisions and analyze whether retrospectively theynegotiated favorable terms. Note the company selected must be approved by the instructor. Itis expected this paper will be 7-8 pages double-spaced including charts and graphs.

Instructor Chuck Sacco, M.B.A. Assistant Dean of Strategic Initiatives, Charles D. Close School of Entrepreneurship Director, Baiada Institute for Entrepreneurship 215-895-2527 / cns322@drexel.edu Office Hours: 1-2p, Tuesdays REQUIRED MATERIALS: There is a significant amount of reading for this course. Preparation for lectures, quizzes and your papers are all predicated on completing all required readings and will help ensure your success in this course. Books required to purchase:

• Angel Investing: The Gust Guide to Making Money and Having Fun Investing in Startups (David Rose, 2014); ISBN 9781118858257 – get by week 2 and complete reading by end of week 4

• Term Sheets and Valuations (Alex Silmerding, 2017) ISBN 9781539229827 – get by week 5 and complete reading by end of week 7

Free articles and resources required to be read (all available in Drexel Learn in ‘Articles and Resources’). Note these will not be printed for you and it is expected that you will read online or print.

• Boostrapper’s Bible • Friends and Family article (Angelblog). Review the Angelblog website entries and friends and

family: http://www.angelblog.net/Startup_Funding_the_Friends_and_Family_Round.html. Be sure to explore the links to “pitfalls,” “valuation,” and “legal issues.”

• SEC crowdfunding rules: https://www.sec.gov/info/smallbus/secg/rccomplianceguide- 051316.htm

• Emerging Trends in Entrepreneurial Finance (Kauffman) • Venture Hacks: How to set the valuation for a startup. http://venturehacks.com/articles/seed-

valuation • Startup valuation calculator: https://www.equitynet.com/crowdfunding-tools/startup-

valuation-calculator.aspx • Best Practice Guidance for Angel Groups – Deal Structure and Negotiation

http://www.angelcapitalassociation.org/data/Documents/Resources/AngelCapitalEducation/AC EF_BEST_PRACTICES_Deal_Structuring.pdf

• Equity investment simulation: http://ownyourventure.com/equitySim.html • Definitive Guide to Raising Money from Angels • Venture Capital Guidebook (Bowne) • K4 Mid-Atlantic Due Diligence Checklist • Additional articles and resources as provided and assigned during the term

mailto:cns322@drexel.edu
http://www.angelblog.net/Startup_Funding_the_Friends_and_Family_Round.html
https://www.sec.gov/info/smallbus/secg/rccomplianceguide-051316.htm
https://www.sec.gov/info/smallbus/secg/rccomplianceguide-051316.htm
http://venturehacks.com/articles/seed-valuation
http://venturehacks.com/articles/seed-valuation
https://www.equitynet.com/crowdfunding-tools/startup-valuation-calculator.aspx
https://www.equitynet.com/crowdfunding-tools/startup-valuation-calculator.aspx
http://www.angelcapitalassociation.org/data/Documents/Resources/AngelCapitalEducation/ACEF_BEST_PRACTICES_Deal_Structuring.pdf
http://www.angelcapitalassociation.org/data/Documents/Resources/AngelCapitalEducation/ACEF_BEST_PRACTICES_Deal_Structuring.pdf
http://ownyourventure.com/equitySim.html
COURSE DESCRIPTION: This course is focused on early stage venture funding. It exposes you to the concepts, practices and tools related to the funding needs of early stage ventures with a focus on bootstrapping, friends/family financing and angel-stage investment. The course will include a review of the unique needs of family businesses, small businesses and social ventures, as well as a deep look at alternative (but increasingly popular) fund raising techniques such as crowdfunding. This will be accomplished through a combination of readings, lectures, quizzes, in-class exercises and individual projects designed to convey the unique environment of investments and new ventures. This course will also teach you to begin to think like an investor, evaluating startup investment decisions at each stage of a startup’s development. In this way, you will be able to critically examine decision criteria around investment decisions, key questions to ask founders, and better understand what founders need to do to create the best possible conditions for favorable investments. LEARNING OBJECTIVES: The course is intended for students who are interested in translating new ideas and research into the commercial marketplace and for students who are interested in a career in intellectual property management or early stage ventures. Students also interested in a career in early-stage investing will find this course useful. Your learning objectives are for you to be able to:

• Explain the financing options available to early stage ventures • Analyze how to best initially structure the venture for short and long-term financing success • Construct and manage a founder’s capitalization table • Determine the ways that entrepreneurs attempt to establish initial valuations • Evaluate and compare the difference between a financially rewarding high-growth opportunity

and a feasible, but not investable idea • Describe alternative financing vehicles as part of the entrepreneur’s options • Determine the information that investors will typically need as part of due diligence • Describe early-stage investment from the perspective of investors including how they assess

investment opportunity and risk

ASSIGNMENTS: Individual projects:

• Crowdfunding analysis paper; this is a 2-3 page double-spaced paper where you will research a successfully completed crowdfunding campaign. The purposes of the analysis are for you to determine what were the key elements to the campaign’s success, what tactics were used throughout the campaign and what has happened to the company since the close of the campaign. There are several high-profile cases you can consider, and you can also focus on campaigns that have been run out of the Baiada Institute.

• Angel investor analysis paper: Using what you’ve learned from the David Rose book, the lectures, guest speakers and suggested resources, develop a 4-5 page paper on your perspectives of angel investing. Specifically address topics such as: what does it take to be an angel investor, what types of companies qualify for angel investing, what do angel investors look for, when do they invest, how do they invest (evaluate their investment decisions) how can

startups most effectively pitch to angel investors. Including examples, references, interviews (startups and investors) and other information to support your analysis

• Final paper: From startup to IPO. You will pick one company that has gone public (or about to go public) over the past five years and analyze its trajectory from startup to IPO. An in-depth analysis of their funding rounds, valuation timeline, ownership (cap table), investor profiles, investor pitches, other factors will need to be discussed. You should also be prepared to evaluate the company’s investment decisions and analyze whether retrospectively they negotiated favorable terms. Note the company selected must be approved by the instructor. It is expected this paper will be 7-8 pages double-spaced including charts and graphs.

Teams: while there are no required team projects, there will be team-based class exercises with teams of 2-3 participating in interactive assignments. PARTICIPATION: Class participation is a key to success in this course. Since we learn more through active involvement, students are expected to prepare before class and make thoughtful contributions to discussions. The goal of participation is to help the class effectively explore the topics presented through integrating concepts from your experience, from the book and articles, and from outside sources in your discussions. GRADING: The grades for this course, using the standard university grade percentage/letter system, will be based on the following point system:

• Quizzes (four at 5% each) 20% • Crowdfunding paper 15% • Angel investor paper 20% • Final paper 25% • Attendance and participation (2 checkpoints at 10% each) 20%

Course schedule: Note that you can see and import the course assignments calendar at https://calendar.google.com/calendar?cid=cGVjdDg5cTZuNGc1Z2ltZ2RsMHA4ZHR0ZjhAZ3JvdXAuY2FsZW5kYXIuZ29vZ2xlLmNvbQ DISCLAIMER: THE INSTRUCTOR RESERVES THE RIGHT TO MAKE CHANGES TO THE SYLLABUS AND SCHEDULE

Tuesday

Thursday

Readings to complete by end of week

Individual assignment (due Sunday 11:59p

Week 1

Course overview Basics of startup financing and basics of Financial Statements

Equity vs. debt financing Principles of Entrepreneurial Finance

Bootstrapper’s Bible Friends and Family article (Angelblog)

Week 2

Founders, sweat equity, bootstrapping Equity allocation case with team discussion

Friends and family capital; Funding for small/family businesses and social ventures

Emerging Trends in Entrepreneurial Finance SEC Crowdfunding Rules

Quiz #1 (focus on financial models, founding, equity allocation and initial sources of capital)

Week 3

Crowdfunding (equity and rewards) Team exercise on crowdfunding

Crowdfunding guest speaker; Other sources of early capital including SBIR, STTR

Venture Hacks – How to set the valuation for a startup

Crowdfunding analysis paper

Week 4

Determining early stage valuations Cap tables introduction Team exercise using the Startup Valuation Calculator

Negotiating with investors: Shark Tank case studies

Definitive Guide to Raising Money from Angels

Quiz #2 (focus on crowdfunding, valuation and cap tables)

Week 5

Valuation timelines and determining investment needs; market sizing Accelerators as funding vehicles

Angel investing introduction: SAFE, convertible notes, equity

Angel Investing – Gust Guide (Rose)

Week 6

Guest speaker: Angel investor (how do angels think and invest) Early-stage risk assessment

Getting in front of Angels with effective investor pitches; Pitchbot team exercise

Best Practice Guidance for Angel Groups – Deal Structure and Negotiation

Angel investor paper

Week 7

Venture capital overview including industry stats and the dynamics of VC funds Team exercise: equity investment simulation

Term sheets 1: overview Venture Capital Guidebook (Browne)

Quiz #3 (focus on angel investing)

Week 8

Series A investing: guest speaker

Term sheet 2: negotiation (team exercise)

Term Sheets and Valuations (Silmerding)

Week 9

The due diligence process Investor relations for early stage companies

K4 Mid-Atlantic Due Diligence Checklist

Quiz #4 (focus on venture capital and term sheets)

Week 10

Exits and going public Wrap-up topics: platforms for creating your startup and investor profiles

Final paper

https://calendar.google.com/calendar?cid=cGVjdDg5cTZuNGc1Z2ltZ2RsMHA4ZHR0ZjhAZ3JvdXAuY2FsZW5kYXIuZ29vZ2xlLmNvbQ
Course Procedures: Dropping or Withdrawing from a Course: The end of the first week is the last day for dropping a course. You may withdraw from a course from weeks 2 to week 7. See http://drexel.edu/provost/policies/course-add-drop and http://drexel.edu/provost/policies/course-withdrawal for more details. Disability: Students with disabilities requesting accommodations and services at Drexel University need to present a current accommodation verification letter (AVL) to faculty before accommodations can be made. AVL's are issued by the Office of Disability Services (ODS). For additional information, go to the ODS website at http://drexel.edu/disability/. Following is the ODS contact information: Physical Address: 3201 Arch Street, Suite 210, Philadelphia, PA 19104 Mailing Address: 3141 Chestnut Street, 81-210, Philadelphia, PA 19104 Phone: 215-895-1401; TTY: 215-895-2299; Fax: 215-895-1402 Academic Honesty Policy: All students are expected to abide by Drexel University’s policies. If an act of academic dishonesty is determined to have occurred, for a first offense, one of the following sanctions will be imposed, depending on the severity of the offense:

• Reduction of a course grade • An “F” for the assignment or exam • Failure for the entire course with the inability to withdraw, or • Other action deemed appropriate by the faculty member.

Examples include, but are not limited to, requiring the student to re-take the exam, re-complete an assignment, or complete an assigned exercise. The decision of the faculty member and the department head shall be reported to the Office of Judicial Affairs, which is responsible for maintaining student conduct records. The incident will result in an official disciplinary record for the student(s). Any academic honesty infraction beyond a first offense is subject to the sanctions described above, as well as to disciplinary sanctions that may be imposed through the University judicial process, administered through the Division for Student Life and Administrative Services/Office of Judicial Affairs. These sanctions may include suspension or expulsion from the University. Drexel University Student Handbook, 2012-2013 edition: http://www.drexel.edu/studentlife/SLhandbook.htm Professionalism: During this course you may be given assignments that will involve observing and interviewing professionals. Adherence to the following guidance is particularly important to a professional code of behavior:

• Treat all those you meet with courtesy, respect and sensitivity to the events occurring within the learning environment.

• When describing your experience use general identifying descriptors (do not identify administrators/professors/students by name).

• Be prepared to cite evidence (not just opinions) as you write up your findings. The discussion board is our community for intellectual discourse. It needs to be a “safe place” to share, probe, challenge and inquire in a respectful way so we all grow as learners.

Evaluation: All graded activities will require students to perform against the standard of professionalism, which implies (at least): accuracy, neatness, correct written and spoken form and style, punctuality, resourcefulness, and creativity. APA: All submitted papers must be double-spaced, 12-point font. Due Dates: Assignments are due the date listed. Late assignments will receive a point penalty equivalent to one letter grade. After one week the assignment will not be accepted and a zero grade will be recorded.

DISCLAIMER: THE INSTRUCTOR RESERVES THE RIGHT TO MAKE CHANGES TO THE SYLLABUS.

http://drexel.edu/provost/policies/course-add-drop
http://drexel.edu/provost/policies/course-withdrawal
http://drexel.edu/disability/
http://www.drexel.edu/studentlife/SLhandbook.htm
PARTICIPATION: