The Economics of Creative Destruction orMaking money from growing things Angel Investment Outcomes Key Strategic Choices The Catalyst Robert E Wiltbank, Ph.D. Associate Professor of Strategy & Entrepreneurship Willamette University Partner, Buerk Dale Victor LLC

Distribution of Returns by Venture Investment Red Bars: U.K. % of exits in that Category Blue bars: U.S. % of exits in that Category UK: Overall Multiple: 2.2X Holding Period: 3.6 years US: Overall Multiple: 2.6X Holding Period: 3.5 years Approx 22% IRR Approx 27% IRR Hold: 3.0 yrs. Hold: 3.3 yrs. Hold: 4.6 yrs. Hold: 4.9 yrs.Hold: 6.0+ yrs.

Entrepreneurial expertise is significantly related to better outcomes. Particularly true in earlier stage investments. –Angels with entrepreneurial experience do significantly better in early stage deals than investors with less experience. (0/1/2 ventures, vs. 3 or more) Expertise in the industry of the venture also valuable. –Significantly related to a reduction in investment failure Investor Expertise

60% better multiple for deals related to industry expertise

Interaction: hi interaction had significantly less failure –Low interaction failed 61% of the time –Hi interaction failed 44% of the time Board Role: related to better returns –The largest effect size in regressions Passive vs. Active –Passive was significantly related to smaller investments and worse returns Managerial Role: more participation isn’t always better –While only about 15% of exits, where an angel was involved in a managerial role, returns were significantly less attractive. Participation post investment

4X better multiple to Board Involvement

2X better multiple for 20+ due diligence

Follow-On Investment from Same Angel Investor 3X better multiple in deals where the investor did not make a follow-on investment. 30% of deals had follow on investments.

Not Rocket Science: Just good business. –Staying connected to your expertise is a good idea. –Even a relatively small amount of due diligence helps avoid failure. –Interaction post-investment is valuable to a point. –Follow-on investments are significantly related to lower returns. Better angel investing

Based on an in Depth Study of 50 Corporate Leaders that led incredible revenue growth projects. –NOT a book about organizing, conceptualizing, or considering growth –A book that gets into the specifics of leading growth when you are on the hook –Lesson 1: Don’t look up look in –Lesson 2: The monkey isn’t on your back, it’s in your head –Lesson 3: It’s already there: reframe to find it –Lesson 4: Small is beautiful –Lesson 5: Lead with pragmatic idealism –Lesson 6: Speed Thrills Crown Publishing: NY, NY

A Passion for Two Worlds Irony Entrepreneurs wish they were the incumbent. Incumbents wish they were more entrepreneurial. Growth Leaders live at the intersection of these two worlds ….and love it.

12 mix the best of both worlds Co-Create with Early Yes’s Leverage Your Organization Small Bets … Fast Pragmatic Leadership Design for Scale Enter with Competitive Intent Entrepreneurial World Corporate World The Catalysts