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| Acknowledgments | |
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| Preface | |
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| Introduction | |
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| An Overview of the Angel Capital Market | |
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| Defining Angel Capital and Pre-IPO Investments | |
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| Trends Increasing Private Equity Investment | |
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| How Angel Capital Has Provided an Infrastructure for Today's Economy | |
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| Inefficiencies in the Market for Early-Stage Company Equity | |
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| Government Attempts to Facilitate Pre-IPO Investments | |
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| The Roles of Traditional Venture Capital and Angel Investors in the Early-Stage Capital Market | |
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| The Pre-IPO Investment Opportunity Defined | |
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| How Angel Investors Add Value Beyond Capital | |
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| Introduction to the Pre-IPO Investment Process | |
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| Key Factors in Successful Angel Investing | |
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| Why Angel Investing Is Attractive | |
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| Specifics on Private Equity Classes | |
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| Demographics of Angel Investors | |
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| Required Skills for Successful Angel Investing | |
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| Developing Angel Investment Criteria | |
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| Structuring an Angel Investment Plan | |
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| Harmonizing Financial and Psychological Returns | |
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| Commonsense Guidelines for Successful Asset Allocation Decisions | |
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| Guiding Principles for Prospective Angel Investors | |
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| Understanding and Managing Risk | |
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| Disadvantages of Angel Investing | |
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| Assessing Risk in a Potential Investment | |
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| Differentiating between Indirect and Direct Venture Investment | |
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| Assessing Your Own Risk Tolerance Level | |
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| Managing Risk with Proven Hedging Strategies | |
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| Types of Angel Investment Strategies | |
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| Defining Angel Investment Strategy | |
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| How Demographics Affect the Choice of Active or Passive Angel Investment Strategies | |
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| Variations in Angel Investment Strategies | |
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| Active Angel Investment Strategies | |
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| Passive, Indirect Angel Investment Strategies | |
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| Deal-Flow Development: Surfacing Angel Investment Opportunities | |
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| How Angels Historically Have Located Deals | |
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| Satisfaction with Traditional Deal-Flow Development Techniques | |
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| Developing Your Angel Investment Goals and Objectives | |
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| Shifting from Informal to More Formal Deal-Flow Development | |
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| The Essential Elements in a Formal Deal-Flow Development Strategy | |
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| Targeting, Positioning, and Defining Investment Size | |
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| Organizing Investor Identity Materials and Deal-Flow Tracking Systems | |
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| Criteria for Selecting the Most Appropriate Communication Channels to Attract Deal Flow | |
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| Advertising | |
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| Public Relations | |
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| Referral-Based Networking | |
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| Caveats: Deal-Flow Development Approaches to Avoid | |
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| Managing the Due Diligence Process | |
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| Why Due Diligence Is So Important in Today's Angel Market | |
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| Beware of Dead Ends on the Road to Riches: Case Studies from the Dark Side of Early-Stage Investing | |
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| Greed and the Entrepreneur's Loss of Ethics | |
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| Government Regulation and Legislation | |
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| Screening Opportunities with the Investor-Oriented Executive Summary | |
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| Why You Should Require a Business Plan | |
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| Investigating the Entrepreneur and Management Team | |
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| Separating Fact from Fiction in Venture Documentation | |
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| Knowing When to Say "No" | |
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| Who Pays Due Diligence Expenses? | |
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| The Preinvestment Audit | |
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| The Analytical Research Approach to the Preinvestment Audit | |
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| The Preinvestment Audit Questionnaire | |
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| Analysis of Financial Projections | |
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| Can Management Reach the Forecast Objectives? | |
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| Interrelationships of Financial Projections | |
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| What Are the Company's Expected Financial Needs? | |
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| How Much Funding Is Sought? | |
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| Evaluating the Company's Stated Capital Needs | |
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| Analyzing the Forecast Balance Sheet | |
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| Description of the Balance Sheet | |
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| Liabilities | |
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| Shareholders' Equity and Net Worth | |
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| The Income Statement or Statement of Operations | |
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| The Income Statement | |
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| Cash Flow Forecast | |
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| The Forecasted Cash Flow Statement | |
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| Use of Proceeds | |
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| Financial Assumptions | |
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| Company Investors, Directors, Advisers, and Resources: Lists for Reference Checks | |
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| Miscellaneous Documents Required for Analysis | |
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| Negotiating and Structuring the Deal | |
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| Definition of Negotiation | |
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| Market Inefficiencies Make Negotiation a Must | |
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| Negotiating the Transaction | |
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| Negotiation Mistakes Made by Angel Investors | |
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| Simple Guidelines for Professional Angel Investment Negotiations | |
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| The Private Placement | |
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| Choice of Securities for Angel Investors | |
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| The Role of Legal Documentation in Private Equity Transactions | |
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| Misuse of Business Plans as Investment Documentation | |
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| Overview of Legal Documents Used in Venture Investment Transactions | |
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| Using a Term Sheet to Structure the Angel Investment | |
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| Model Term Sheet Checklist | |
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| Valuation of the Early-Stage Company | |
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| Pricing as Good Judgment, Not Formulae | |
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| Factors in Valuing Potential Investments | |
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| Macroeconomic Forces in Valuation | |
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| Subjective Determinants of Valuation | |
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| Fundamentals of Valuing Start-Up Ventures | |
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| Sweat Equity: The Investor's Perspective | |
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| Overseeing and Advising Postinvestment | |
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| Definition of Monitoring the Investment | |
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| Passive Monitoring and Evaluation Techniques | |
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| Active Monitoring and Evaluation Techniques | |
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| Harvesting Returns: Exit Routes to Liquidity | |
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| Planning for the Angel Investor's Financial Reward | |
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| A Contrarian Perspective on Liquidity in Public versus Private Markets | |
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| The Importance of Identifying Exit Strategy before Investing | |
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| Reasonable Expectations for Investment Return and Hold Time | |
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| Evaluating Your Returns | |
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| Realistic Exit Routes | |
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| The Living Dead: Coping with the Marginally Performing Investment | |
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| Restricted versus Free-Trading Stock | |
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| Transforming Investment Losses into Tax Gains | |
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| Conclusion | |
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| Internet Directory | |
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| Angel Investing Conference/Forum Directory | |
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| A Model Term Sheet | |
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| Valuation Case Study | |
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| Hypothetical Valuation Example | |
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| Frequently Asked Questions | |
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| Suggested Reading List | |
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| Supplementary Reading | |
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| Glossary | |
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| Index | |