Angel Investing and Agriculture

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Angel Investing and Agriculture

• Badger AgVest, LLC
• An Investor Alliance for Agriculture
• James Hanke, Director
• www.badgeragvest.com

Badger AgVest, LLC www.badgeragvest.com
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Angel Investing and Agriculture

• Angel Investing Overview
• Badger AgVest Overview
• Issues and Opportunities

Badger AgVest, LLC www.badgeragvest.com
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What is Angel Investing?

• SEC Regulation D
• Allows companies to sell unregulated securities
  to Accredited Investors
• Accredited Investors
• Defined as individuals with a net worth of 1
  million, or annual income of 300k
• Accredited Investors take equity commitments in
  early-stage companies

Badger AgVest, LLC www.badgeragvest.com
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10 20 Percent Rule

• Early-Stage investments are high-risk,
  high-reward investments
• As a general rule investors should invest no more
  than 10-20 of their total investment portfolio
  in angel investing

Badger AgVest, LLC www.badgeragvest.com
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Financing Life Cycle

• Discovery Proof of Product
  Product Manufacturing
• Concept Design Development
  Delivery
• __________________________________________________
  _____________
• Idea Pre-Seed Fund Seed Funding Start
  Up Funding Expansion
  Operating Capital
• Founder
• Family Friends Venture Funds
• Angels Institutional Equity
  Angel Groups Loans / Bonds
• Seed Funds

Badger AgVest, LLC www.badgeragvest.com
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Capital Gap

• Notion that Venture Capitalists fund most early
  stage ventures is false
• VCs and Angels fund similar companies, but at
  different stages
• Companies need Angel to fill the capital gap
  between prototype development and achieving
  significant sales
• In the first half of 2006, Angel Investors funded
  24,500 early-stage ventures with 12.6 Billion
  (VCs funded .3 Billion)

Badger AgVest, LLC www.badgeragvest.com
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Expected Rate of Return

• Angels expect an annualized rate of return of
  20-25
• Results from a combination of high returns and
  total losses
• 10 investments equals
• 4 losses
• 3 break-evens
• 3 home runs

Badger AgVest, LLC www.badgeragvest.com
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Badger AgVest, LLC

• An Investor Alliance for Agriculture
• Designed to provide members an opportunity to
  make angel investments in Wisconsin-based,
  ag-oriented companies
• Tool to rationalize the process of connecting
  investors to viable Wisconsin investments

Badger AgVest, LLC www.badgeragvest.com
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Badger AgVest Mission

• To promote the development of successful
  agricultural businesses that directly benefit
  Wisconsin producers and our rural economy
• Support innovation and emerging technologies that
  bring value to ag-related businesses

Badger AgVest, LLC www.badgeragvest.com
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Membership

• 70 members to date
• Members pay a one-time membership fee
• Members make their own investment decisions not
  all members elect to invest in each opportunity

Badger AgVest, LLC www.badgeragvest.com
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Why Badger AgVest?

• Rationalizes the process of connecting investors
  to early-stage companies
• Coordinated deal flow, company analysis
• Ability to deliver larger traunches of equity
• Time-saving
• Ag producers know the ag industry
• WI ACT 255 Tax Credits

Badger AgVest, LLC www.badgeragvest.com
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Opportunities in Agriculture

• Clean Technologies
• Bio
• Herd management
• Organics
• Alternative Energy

Badger AgVest, LLC www.badgeragvest.com