helping your business clients attract outside capital richard c. bruder, esq. october 20, 2006 7457...

Helping Your Business Clients Attract Outside Capital

Richard C. Bruder, Esq.

October 20, 2006

7457 Franklin Road, Suite 250Bloomfield Hills, Michigan 48301(248) 539-2030rbruder@elp-law.com

Different Stages Attract Different Capital

Pre-Seed Founder’s

Seed Friends and Family

Early Stage Angel Investors

Mature IPO/Merger

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Bootstrapping

• Barter• Equity• Cut personal expenses• Buy used• Freeload• Incubators (or home office)• Customers!

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What Do Angels Look Like?

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How Angels Look At Deals -

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The Five Challenges

1. Technology - Can It Be Done?

2. Development - Can We Make It?

3. Production - Can We Make It Profitably?

4. Market - Will Someone Buy It?

5. Execution - Is This The Team To Do It?

How Angels Look At Deals -

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The Ten Advantages

1. Management2. Compelling Idea3. Proven Concept4. Market Size5. Competition6. Financial Projections7. Exit8. Production9. Marketing Plan10. Risk Management

Resources for Entrepreneurs

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Where to Find Angels

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Typical Deal Structure

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Preferred Stock

Convertible Debt

Basic Legal Issues

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Choice of Entity Founders Agreement

What does each provide? What time commitment? What percent ownership? Vesting? Invention Agreement? Non-compete?

Securities Law Due Diligence Lite

Q & A

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