We just released our Seed Capital reVIEW report analyzing seed and angel capital being raised by early-stage companies in Minnesota during the first six months of 2014. For this report, we analyzed survey responses relating to 84 separate deals completed during the first half of this year. The majority of deal investors were individual angels or angel groups. The sample encompassed a broad range of industries, with a particular concentration in the medical/healthcare, technology, and cleantech/biotechnology industries. A few highlights from the survey include:
• A significant majority of the deals utilized the Minnesota
Angel Tax Credit.
• Approximately 72 percent of respondents reported offerings structured using equity
(68 percent common equity and 4 percent preferred equity), with debt securities
comprising the remainder.
• The most frequent rights received by equity investors were:
o Participation rights in future investment rounds.
o In preferred equity deals, 80 percent reported a 1x liquidation preference.
o One board seat or board observation right.
• For debt-structured offerings:
o Almost all respondents reported debt with an initial term of at least one year.
o A majority of respondents reported receiving rights to participate in
future financings.
o Almost 70 percent of debt-structured offerings were convertible
to company equity.
To review the complete survey, click here.
We hope you enjoy the second publication of the Seed Capital reVIEW and look forward to your support as we collect data for the second half of 2014 (not long after the ball drops on 2015).
Happy capital raising!
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