Angel Funds

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Angel Funds Students Partner to Create Value

• UND Center for Innovation,
• Dakota Venture Group
• Valley Angel Fund

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UND Center for Innovation

• 1. Innovation
• Tech Commercialization
• SBIR/STTR awards
• InnovateND competition
• 2. Entrepreneurship
• Early-stage ventures
• Incubators tech park
• 3. Private Investment
• Angel Funds
• Access to capital programs

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North Dakota Context

• 47th in population rural
• Educational Performance is high
• Two research universities UND NDSU
• Ag, energy, manufacturing, exports
• Export educated youth and investment (profits)
• 1984 Center for Innovation formed
• Access to capital initiatives since 1987

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UND Center for Innovation

• Strategic partnerships (deal flow)
• Red River Research Corridor (UND/NDSU)
• NDSU Research Park (Share EDA grant)
• Dakota Foundation (Entrepreneur Finance)
• RAIN Source Capital, St Paul (23 funds)
• www.Innovators.net

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a

• Source of venture deal flow
• Innovate ND program launched in 2006-07
• 86 business plans statewide in all industries
• Angel investors are judges
• Top 5 receive cash start up support services
• Governor sponsored, Center delivered
• www.InnovateND.com

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Dakota Venture Group

• Bart Lynn Holaday -Dakota Foundation
• Launched Oct 2006 5 student managers
• Now 18 graduate undergraduate students
• 300,000 evergreen equity fund
• Only Student-managed Venture Fund
• Do it all Source deals, due diligence,
  valuations, term sheets, negotiations, structure
  deals, monitor portfolio, exits, syndicate,
  Anglesoft, etc.
• www.DakotaVentureGroup.com

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• 2007 Deal Flow 55 business plans
• 2007 Portfolio 3 equity investments
• 1 seed loan
• 2 regional ventures, 2 student ventures
• Evergreen concept - gains/losses recycled
• Harvest Fund, LLC for profit in process

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• DVG Portfolio
• WineStandard.com online retailer (student)
• leveraged with entrepreneur loan, 2nd round
  angel investor
• Ntractive web-based SBM SaaS software
• two DVG members became lead staff
• Simple Furniture eco-friendly furniture
• Club Express bus shuttle service (student)

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• Grow Talent, Experiential learning
• Center - Entrepreneur Finance Internship
• Ruvelson RAIN Maker Fellow
• Angel Internships (5)
• Manage CONAC Portfolio
• Advisors 6
• Sponsors help fund operations

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Valley Angel Investment Fund

• 31 accredited investors 1.3 M
• 11 out of town alumni
• Member-managed
• Volunteers (No 2-3 fee) 20 carry
• Meet 6 times per year
• Tied to UND Center for Innovation

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Investing Guidelines

• Seed, early to mid-stage
• Located where investor can monitor
• Due Diligence
• Key Leadership integrity, transparency,
  coachable
• Venture Valuation reasonable
• Scalable in larger market 10-30X return
• Plausible exit strategy (IPO not likely)
• No more than 10 in any one investment

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Valley Angels

• Results in Year One (2007)
• 4 investments 275 K 5 M (201)
• Yield Rate 4 of 18 22, 4 in DD
• 50 K - 150 K per deal side-by-side

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Valley Angels

• Side-by-side investments syndication
• RAIN Source Capital is a partner/advisor
• 24 funds in 6 states (20 M, 800 angels)
• 4 in North Dakota, 3 nearby in Minnesota
• Center staff - field agent
• Prepare Entrepreneurs - coaching
• PPT is venture pitch, not product pitch

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Valley Angel Internships

• Student interns work closely with angels
• Due Diligence, Valuations, Monitor
• Network with other angel funds
• Enhance syndication between funds
• 5 Interns Grand Forks, Fargo, Alexandria, Minot,
  and Bismarck (2 more in 2008)
• www.ValleyAngelFund.com

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Valley Angels Students

• Students step up to plate performance
• Angels step up to plate example
• Due Diligence high level
• Entrepreneurs recruit talent
• Syndication easier through angel network
• Send students to educational seminars
• Great experiment better than expected

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Summary

• Center entrepreneur deal flow
• Angel Funds important source of equity
• (20 deals for each VC deal, 201 leverage)
• Students experiential learning in private equity
• Both perform at higher level together

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Contact Info

• Bruce Gjovig, Entrepreneur Coach
• Center for Innovation
• Bruce_at_Innovators.net
• 701-777-3134
• Tom Kenville, Chair
• Valley Angel Investment Fund
• Tom_at_tlobalweb.com
• 218-779-9950
• Lee Groeschl, Angel Field Agent
• Center for Innovation
• Lee_at_Innovators.net
• 701-777-6511