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    Angel Knowledge Series
    SPILLED MILK: AVOIDING COMMON SEED AND ANGEL LOSSES.

    Panelists.
  • • Ben Littauer, Boston Harbor Angels.
  • • Craig Mullett, Angel Investor Forum.
  • • Dave Berkus, Tech Coast Angels.
  • • Edgar Harrell, Active Angel Investors.
  • • John Ricci, US Angel Investors.
  • • Michael Blake, StartupLounge.
  • • Pete Marsnik, Chippewa Valley Angels.
  • • Quinten Messbarger, Centenial Investors.
  • • Moderator: Michael Price.

    Agenda.

    A. TOP 20 ANGEL SYNDROMES.
    1. Doubling down (Weak Hand Syndrome).
    2. Reinvesting too soon (Midas Syndrome).
    3. Just needs good leadership (Messiah Syndrome).
    4. Failing too late (Damn the Torpedos Syndrome).
    5. Can't let others down (Martyr Syndrome).
    6. Longer sales cycle than expected (Product Sucks Syndrome).
    7. Swimming upstream (Superman Syndrome).
    8. Timing too early (Pioneer Gets the Arrow Syndrome).
    9. Market too niched (All Dressed Up Syndrome).
    10. Loss of key people (Elvis Left Syndrome).
    11. No competitors (Ignorant Bliss Syndrome).
    12. Bad leadership (CEOh No! Syndrome).
    13. One shot so must be perfect (Failure to Launch Syndrome).
    14. Unrealistic projections (Billion Soon Syndrome).
    15. No market validation (If We Build It Syndrome).
    16. Market is about to turn around (Nuclear Winter Syndrome).
    17. Just starting to ramp up (Fizzled Syndrome).
    18. Built a great pipeline (Failure to Convert Syndrome).
    19. Far better than competitors (Will Crush WalMart Syndrome).
    20. Demand is about to explode (Great Expectations Syndrome).

    B. ERRORS IN SELECTION.
    1. Poorly designed business model.
    2. Picking a niche that looks good but isn't.
    3. Following a hot trend with no substance.
    4. Failure to adapt to a changing market.
    5. Poor pricing strategy.
    6. Paying too much attention to mgt team and not enough to core bus. opp.

    C. ERRORS IN FINANCING.
    1. Undercapitalized out of the gate.
    2. Reliance on critical financing that dries up.
    3. Negotiating equity rounds based solely on the valuation.
    4. Fraud or personal use of business funds.
    5. Miscalculating the amount required.
    6. Financing a business that should be bootstrapped
    7. Overvaluing the early round

    D. ERRORS IN PRODUCT DEVELOPMENT.
    1. Development without asking or acting upon customer needs.
    2. Lack of meaningful competitive advantages.
    3. New products/focus that drags down profitable ones.
    4. Failure to anticipate or react to competition.
    5. Failure to anticipate or react to tech or market changes.

    E. ERRORS IN MARKETING/SALES.
    1. Poor market research leading to an inaccurate assumptions.
    2. Sloppy or ineffective marketing.
    3. Competing head-to-head with industry leaders.
    4. Trusting your capital to well marketed salespeople.
    5. Overdependence on a single customer.
    6. Changing sales/mkt team with change in business model.
    7. Pricing too low.

    F. PROBLEMS WITH MANAGEMENT.
    1. Poor internal controls/accounting.
    2. Poor execution.
    3. Breakup of the founding team.
    4. Growing too fast or overexpansion.
    5. Divorce or family pressure on time or money commitments.
    6. Inability or Unwillingness to sell.
    7. Poor cash mgt, can't make payroll Monday.
    8. Changing key management

    G. ERRORS ON LEGAL.
    1. Issuing founder shares without vesting.
    2. Waiting to consider international intellectual property protection.
    3. Disclosing inventions without an NDA or before Patent App filed.
    4. Starting employees from competitors without checking their agreements.
    5. Promising more than the business can deliver.
    6. Absence of a buy/sell agreement.
    7. Investing conditional on MCA revision (merchant cash advance?)

    H. ERRORS IN EXITING.
    1. No detailed exit plan.
    2. Waiting too long to sell (optimum value during high growth).
    3. Accepting too much stock to cash ratio from the acquirer.
    4. Not structuring to minimize taxes.
    5. Earnouts gone bad.
    6. Unrealistic valuation expectations.





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