I'm the President of the local ACG Chapter and Eric Dobson is the CEO for the entire organization. ACG members invest in startups in exchange for equity (ownership). We usually invest around $250,000 in seed rounds but have done as much as $8.7M. Equity investing is only for companies capable of changing Valuation quickly and Exiting. Private Equity Investors (Angels and VCs) get their money back out at Exit (Acquisition or IPO).

Depending on the growth/exit potential of a business, different paths for capital are dictated. Either Debt Financing if the business doesn't change Valuation quickly. Or, Equity Financing if the business changes Valuation quickly. 

Equity investors are looking for opportunities where...

  1. The Founder is willing to give up Equity (10-20%) in exchange for their investment
  2. The seed round is $100k-$1M
  3. The Valuation changes quickly and significantly. $5M today, $15M in 18 months, $50M in 3 years, $250M in 7 years.
  4. Exit potential exists for the business. Evidence shows the company will be acquired or go public in 5-10 years.
  5. The Founder is realistic and coachable. You give up a lot when you go down this path. Investors don't care about your dreams or vision for the company. They only care about increases in valuation and exit potential. 

I hope this is helpful to everyone.

I'm always available to talk to Entrepreneurs about their startups, businesses, lives, etc. Just grab some time on my calendar using http://calendly.com/leonardknight

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Comment by William Milam on January 25, 2018 at 9:52pm

IMHO, before you ever talk about money, the PEI & entrepreneur should have a beer together, play a round of disc golf, etc.  If you don't have trust and rapport with each other, it won't work out.  Next, figure out what the company needs, and what expertise or contacts the PEI has.  Money is the 2nd most important thing the PEI brings to the table. The PEI hopefully has industry experience, sales skills, regulatory know-how, etc to help increase success rate.


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