Startup Investing

Coming to Terms with Term Sheets: What Angel Investors Need to Know

Coming to Terms with Term Sheets: What Angel Investors Need to Know

Jul 1, 2013 | ,

When an investor plans to make an investment in a startup, one of the things in the forefront of his or her mind is: what are the terms of the deal? Well, luckily a document exists whose sole purpose is to delineate all the deal terms. It is agreed upon by two parties, the startup and the investor, and called, fittingly, a term sheet. Term sheet: investment specifics So what does the big scary term sheet look like “in real life”? While I was reading through terms sheets during my internship here at OurCrowd, I realized that after parsing away the legal jargon (and parsing away some more…), they are basically lists—lists of terms that the investor and the startup have agreed to adhere to in this investment. Note that the term sheet (other than the confidentiality agreement therein) is not legally binding, but under most circumstances, these same terms will make their way into legal documents relating to the deal. The list of terms can be broken down into two categories by asking a simple question: as an...

Read More
Israeli M&A on fire: mid-2013 update

Israeli M&A on fire: mid-2013 update

Jun 13, 2013 | , ,

The Google acquisition of Israeli social navigation app Waze for $1.03 billion is one of the largest high-tech acquisitions in Israeli history (The all time record goes to Cisco for buying NDS in 2012 for the price of $5 billion). The interest of international tech giants in Israeli startups is nothing new. With more startup companies per capita than any other country, Israel is widely hailed as the Startup Nation. As we know, Israel is more than happy to sell its startups to large entities knocking on its door. According to the IVC Research Center, 2012 was one of Israel’s most successful years for high-tech M&A in the past decade, yielding $9.95 billion in exits – 88% above 2011 levels. When all is said and done, it’s not every day that you hear about titans like Google and Facebook going head to head in a race to buy out a company at these valuation levels. In the end, Google won the war for Waze by letting the company stay in Israel. It was reported that the Facebook tie-up fell apart over Facebook’s insistence on Waze moving its...

Read More
US venture capitalists bullish on equity crowdfunding

US venture capitalists bullish on equity crowdfunding

May 26, 2013 | , ,

By all accounts, crowdfunding is still in its infancy. For the unfamiliar, crowdfunding is where individuals join together to raise capital online. Crowdfunding, as we know it now, comes in two flavors: donation-based crowdfunding: Individuals band together to fund projects, events, and social causes. In return, individuals donating via crowdfunding receive the pleasure of doing good and frequently, there’s some type of prize associated with giving levels (not unlike general charitable giving campaigns). equity-based crowdfunding: In this type of crowdfunding, individuals don’t donate money —  they invest it. Typically, funding is restricted to accredited investors (who meet certain net-worth and/or income levels) who receive an equity share in a company in return for their money.  The JOBS Act in 2012 set the stage to open equity crowdfunding to the non-accredited investor audience (read, everyone else), though in reality, guidelines have not yet been set. How traditional VCs view crowdfunding Clearly, equity based crowdfunding (and crowdfunding, in general) has the potential to really change the way we invest in private companies. I think there will always be room (and money)...

Read More
9 Tools Angel Investors Use to Track Potential Investments Online

9 Tools Angel Investors Use to Track Potential Investments Online

May 6, 2013 | , ,

Identifying potential investments isn’t easy. Startup investors — from angels to venture capitalists — spend lots of time developing systems to bubble up potential investment opportunities. This is frequently a junior analyst’s job: to screen, track, and identify ideas that are worth spending more time researching. Identifying a potential investment isn’t all about finding the right company — it’s also about timing. It happens frequently that companies may be too early for an investor. So, how do you continue to track a company until it’s fully baked? Here are a few of the tools angel investors use to identify and track potential investment opportunities. Startup Platforms OurCrowd: We know angels don’t have a lot of time to source their deals. We’re seeing at least 3 deals per day cross our desks and have a team of analyst scrubbing through them before we decide to make an investment. All that work is put into our due diligence before an opportunity appears on our website. On startup platforms like OurCrowd, investors get a smattering of different types of deals at different...

Read More
What we’re hearing: Angel investing in Boston — with Richard Lucash

What we’re hearing: Angel investing in Boston — with Richard Lucash

Mar 18, 2013 | ,

We recently posted about incredible opportunities we’re seeing to invest in Israeli startups, and it got us wondering what angel groups in other parts of the world have been seeing. To get some more color on the Boston tech scene, we went directly to the source. We had the chance to talk to Richard Lucash, a Boston-based attorney for emerging tech companies, about deal flow in Boston and Cambridge, Massachusetts. Richard co-founded the LaunchPad angel group and, with Jeff Stoler, recently launched a new angel group called SideCar Angels What’s deal flow like in Boston? In Boston, most angel group deals are syndicated.  The area is the national leader in doing angel syndications.  As part of this syndication effort, members of multiple groups may take part in due diligence.  SideCar is focusing on facilitating deals by filling out syndicated rounds. How do you generate deal flow? A large percentage of our deal flow comes from Boston area angel groups and micro VCs, however, often the companies approach us directly. What types of deals have you been seeing? We see...

Read More