What are Investors Looking for when Evaluating your Business for a Potential Investment

transcript

The HVCFI / iCANny Entrepreneur’s Breakfast Forum July 11, 2012

What Investors Look for When Evaluating Your Business for a Potential Investment

Stonehenge aims to catalyze rapid growth of companies in up-and-coming markets by backing passionate entrepreneurs solving business problems. Stonehenge is focused on finding investment opportunities in underserved markets, areas where there is an abundance of entrepreneurship and innovation, but a relative shortage of locally available professionally managed capital.

Stonehenge’s Nationwide Footprint

Stonehenge is a Partner in the Communities we Serve

Why Entrepreneurship?

YOUR FACE HERE

Why Entrepreneurship?

Entrepreneurship for America’s Future

Chart from NVCA Venture Impact report, 2011 http://www.nvca.org/index.php?option=com_content&view=article&id=255&Itemid=103

What is Venture Capital?

So, START YOUR COMPANY!

Where to Get Help Early

Hudson Valley Pleasantville Syracuse

But…How will I finance it?

Making investments at the earliest stages of a company’s development

involves extraordinary risk. Young companies have little or no collateral to

secure bank loans, no assets or track records to attract financing from private equity firms and no opportunities for short term gain to

interest hedge funds. Venture capitalists step in and assume this risk by providing capital.

First…A Detour

Is Venture Capital Right for My Business

How Your Investor Sees It

Back on Track

Is Your Company Appropriate for Venture Capital?

What Kinds of Companies Attract Venture Capital?

How to Find the Right Match

There exists a HUGE Capital Gap when you need it most

Typical starting pointat which venture capitalinvestment takes place

Concept

SEED/Start-Up

Individual AngelsAngel Groups

Early Stage VC

Mid/Later Stage VCCAPITAL GAP

Friends/Family

AchievingLiquidity Event

"Capital Gap"15

EARLY GROWTH LATER

NegativeReturns

FUNDER

($ millions)Revenue

Start-Up

1 2 3 4 5 6

VC Financing is Increasingly Hard to Find

Regionally Active Early Stage Funding Assistance

Where does Stonehenge Growth Equity fit in?

Growth Stage: Post product, revenue, market introduction • Mitigates technology risk • Mitigates market adoption risk • Mitigates financial risk

Mitigate risk, support rapid growth • Business model is proven and scalable • Capital invested is used to support

accelerating growth • Significant upside with improved win/loss ratio

Technology-Enabled Businesses • Applying technology to solve

business problems • Typically recurring revenue models • No capital intensive R&D cycles • Usually software and/or services

Where does Stonehenge Growth Equity fit in?

Stonehenge Focus • Intersection of Healthcare and IT • Post product development, early revenue,

reference customers • $1 million investment (including match)

What we won’t do • Drug Discovery • Medical Devices • Science Projects • Heavy hardware investment

Innovate NY • $5 million allocation + matching funds • Seed-stage fund • New York based companies

Active Partnership Promotes Success

Active Board Participation • Strategic Planning • Sales & Marketing • Corporate Governance

Deep Network of Relationships • Recruiting • Service Providers • Other Investors

Trusted Advisors to Entrepreneurs • Support early stage companies • Honest feedback, timely response • Willing to talk before you’re ready for investment

Keys to Attract Capital: Management Team

Keys to Attract Capital: Solve a BIG Problem

Keys to Attract Capital: Generate Revenue

Keys to Attract Capital: Be Passionate

Thank You Brian S. Model Managing Director, Stonehenge Growth Capital 152 West 57th Street, 20th Floor, New York, NY 10019 (212) 265-9380 bsmodel@stonehengegc.com

What are Investors Looking for when Evaluating your Business for a Potential Investment

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