Before applying to the North Bay Angels, we encourage founders to review the free startup tips and pitching advice from our Selection Committee Chair at FeelTheBoot.com
Our Ideal Startup Investment
We are open to review applications anywhere in the U.S. with preference given to companies located in Northern California.
The NBA's ideal investment is a start-up company that:
Has a unique and protectable advantage in its market and addresses a critical need
Is beyond the concept stage and has at least a functioning prototype of its product or business proposition
Has demonstrated a need for and acceptability of its product, service or technology in the marketplace
Has modest total capital needs to execute the business plan to success, to avoid excessive dilution to Angel investors
Has at least the beginning of management team and board should be in place
It is preferable that the company be a C corporation or become one upon funding.
Criteria for Company Selection
We look for several items when we decide whether to ask a company to present to the screening committee:
Does the business meet a real need in the market place in a unique way that can beat competition?
Is the need and size of the market significant? Can the company achieve $20M plus revenue in 5 years?
Are the future capital investment needs moderate? If the company has to raise much in excess of $30M or so, the deal may not be attractive to angel investors who then have a high risk of being severely diluted unless they can keep up with their pro rata investment rights.
Is there a realistic exit strategy that has the potential to provide a 10X or more return to the investors?
Is the management team capable? Do they have a track record of building and operating a business successfully?
Are the deal’s terms appropriate?
Are there defensible barriers to entry against potential competitors?
Mezzanine Financing for Established Companies: Flex-Mezz
NBA's Flex-Mezz extends the group's reach to address established North Bay companies with proven management. The applying companies should be seeking additional financing to support their growth plan by attracting investors who add capital, networking and guidance to their firm with only modest equity dilution.
Mezzanine Financing is appropriate for companies that fall between the criteria of angel investments and bank financing. These companies may not appeal to angel investors because they don't have extraordinary (hockey stick) growth potential even though they are a growth business capable of generating dependable cash flow. The business is not currently bankable without an additional equity infusion. Investors' expected returns are lower than for angel investments but higher than for bank financing. The new funds will generally be used for expansion or acquisition.
Criteria for Flex-Mezz Selection
Applying companies should be generating sales in excess of $1,000,000 with positive cash flow. The preferred companies should be exporters of products or services to areas outside of the North Bay so that there is a net employment gain for the North Bay. Service companies such as restaurants, retailers, and most professional providers would not meet the criteria.
Companies should have the potential of creating 10+ high value jobs. The range of a potential investment is $250K - $2M, and the investors anticipate a monthly or quarterly return. In addition, the NBA will look at participating in alternative investments that provide similar returns.