The startup landscape is undergoing explosive growth and watershed change. Over ten million U.S. households now enjoy accredited investor status and once the SEC fully enacts the Jumpstart our Business Startups Acts of 2012 (H.R 3603) countless others (albeit, with limitations) will be eligible to invest in an emerging company. As such, the traditional role played by investment intermediaries and facilitators will shift as funding portals, micro funds and deal syndicators reconfigure the landscape.

The AngelRoot platform was created in response to investors needing a global repository of deals. Companies that may be raising capital can become discovered and have their profiles evaluated, not only by individual investors but by investment fiduciaries, intermediaries and facilitators. Each investor can then perform its own due diligence, valuation and negotiations, all outside the confines of AngelRoot. Entrepreneurs, please keep the following in mind when preparing your startup’s profile:

DON’T SUBMIT CONFIDENTIAL INFORMATION IN YOUR PROFILE. After an investor makes contact you can ask them to sign an NDA.

LIMIT DISCUSSION PERTAINING TO THE AMOUNT OF CAPITAL YOUR COMPANY MAY REQUIRE TO THE INVESTMENT INFORMATION SECTION OF YOUR PROFILE. Only Investors have access to that section.

YOU SHOULD NOT PROVIDE INFORMATION PERTAINING TO: (a) the type(s) of securities that you may be offering; (b) the terms of any securities offering that you may be contemplating; (c) the valuation that you are placing on your company; or (d) the ensuing use of proceeds from an offering. Typically, this is the type of information that would be provided in a securities offering. Please do not use the platform to offer or solicit the sale of securities.

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Your Executive Summary is perhaps the most important element of your profile. If an investor is taking the time to read it, it means that they have more than likely already reviewed your highlights and read your pitch. Generally speaking, an executive summary should objectively describe the company, the team and its business; briefly explain WHAT is planned; and WHY the opportunity exists. If that information resonates, your full business plan coupled with a live presentation will allow investors to better understand HOW the plan will be executed and the quality of the management team – the critical WHO factor. Please keep in mind, the purpose of your executive summary is not to close a deal, but rather, get you through an investors’ front door. Here are some general tips for preparing your executive summary:

Highlight your business – do not try to fully explain it. Even though there is an option to upload your own executive summary, in most every instance, investors will first read the information you provide in the on-line form. We understand that standardized formats tend to stifle creativity. Sorry, but it is the most efficient way for investors to screen deals.

Be as concise as possible – keep your answers simple.

Maintain a consistent and realistic time context. For example if your business is only in the concept stage, words like “we believe we will achieve ABC by XYZ date, or we plan to ABC in the next XYZ months” are much better than saying “we have”.

Quantify whenever possible. Facts are always better than narrative. Investors read hundreds of executive summaries. It is important that they UNDERSTAND your business before hearing about how GREAT the business is and how PASSIONATE your team is about it. If your executive summary is little more than a hyped-up sales brochure (“all sizzle”), it will not resonate well. Keep the “noise” level to a minimum.

Focus on the business, not on the terms of an investment. An executive summary is not an offering document.

And, in the event that there is a question that is not applicable or you cannot answer, DO NOT FORCE AN ANSWER. Unless you are applying to a business plan competition with different rules, it is better say: “We’re considering the following options . . . “. For example, if your company has invented a teleportation machine (e.g. “beam me up Scotty”) but has not as yet figured out a business model, you will probably not loose an investor’s interest if you don’t answer the business model question.

And, here are some suggestions for preparing various sections of your executive summary.

INTRODUCTION / BUSINESS SUMMARY: Set the stage. This is the first exposure a reader will have to your business, so keep in mind that one of the first things that should be communicated is the business’ frame of reference. Do not be assumptive. You need to explain what the business is before telling the reader how great it is and how committed your team is to making it a success.

PURPOSE AND VISION: Summarize why your team started the business – your vision. What is the business is promising? This is your opportunity to tell a story. Storytelling is one of the most effective ways to engage someone. Talk briefly about how the team developed the idea and the relationship between your team members. Early-stage investors most always look at team first (ability to execute) and idea second. Engage the reader.

TARGET CUSTOMER AND HIS OR HER PROBLEM: Who is it that your business is targeting (i.e. the homogeneous characteristics of your addressable market) and what is your target customer seeking (what is the target’s “problem” that you plan to solve). Generally, “investment worthy” businesses are those that have a clearly articulated, very large, addressable market that share a substantial problem (they have a real level of “pain”). Examples are:

It’s the 1970’s and we are introducing, Sanka® (your brand name), a new brand of coffee (your customer’s frame of reference) to: caffeine concerned coffee drinkers (your target customer) because our product offers no caffeine to upset them (your unique and enduring benefit);

It’s 1998 and we’re launching Google® to organize the world’s information and make it universally accessible, because billions of people find it near impossible now to find the information they are looking for on the web;

It’s 2014 and we’re launching AngelRoot™ because the more than 600,000 businesses that are started each year in the U.S. alone can’t seem to easily find the capital they need to get their businesses going or the talent needed to help the business grow.

OPPORTUNITY: Taking your target, landscape, trends and competitive advantage into account, define and to the extent possible, quantify the addressable “market” for your product or service. That is to say, how large is the market that you plan to pursue and what share are you seeking to achieve.

PRODUCT OR SERVICE: Clearly define your product or service (form, function, features, Brand/IP) and explain how it will uniquely benefit your target customer. This is a particularly good section for you to discuss whatever you feel is proprietary and/or protectable about your product or service in context of the benefit it provides. It is much better to explain the claims of a pending patent in context of the benefit you feel those claims will provide (and competitive position) than to merely state that you have a pending patent.

BUSINESS MODEL: Explain how you plan to develop, make, market, price, sell, distribute and promote your product or service. Describe anything that is novel about your model and compare its efficiency to your competitors. If applicable, explain the value of your company’s intellectual property in context with your business model. Ideally, your business model should be scalable and sustainable.

COMPETITIVE LANDSCAPE: Define your competitive environment. discuss technological and other trends that may assist or impede your success.

ACCOMPLISHMENTS. Explain what has been accomplished since inception, how long it has taken and how much it has cost.

BUSINESS MILESTONES: Objectives and Strategies. Looking forward what do you plan to accomplish, how long do you think it will take and about how much money do you think you will need?

BUSINESS RISKS: It is important that you communicate that you understand the balance between investment risk and reward. This is not the place to talk about rewards or typical investment risk, but rather where you should objectively be addressing business vulnerabilities.

TEAM: Briefly describe your current team and explain why they have the experience (track record), smarts, enthusiasm and determination to run the business at its current stage. Identify the competencies of new team members and advisors that you will need to commercialize the business. Early-stage investors most always look at team first (especially, the ability to execute and to become world-class) and idea second.

Do Not Submit Anything That You Consider To Be Confidential or Proprietary. We do not have the ability to keep any of the material you submit confidential. DO NOT SHARE YOUR TRADE SECRETS. AngelRoot shall not have any obligation, duty or responsibility to maintain or attempt to maintain the confidentiality of any information submitted.

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Congratulations. You’ve submitted your company profile and have published it in the industry network that matches your business and in a University network, probably where you went to school. Before you consider paying a guest fee to publish it in additional networks, we recommend that you first secure feedback from the investors and mentors that are in the networks where your profile has already been published.

If you are an administrator, you can take a look at the traction re- port on the bottom of your startup’s profile. It will show you where investors are filing your profile (e.g. screening room; observe/track folder; no interest folder or deal room). You should also take a look at the “Knee Jerk” feedback report. These are the comments made before your full profile is opened and screened, so it should tell you if your pitch is reso- nating. The traction report will also show you to what extent your profile is being referred. Then, based on all the feedback you start receiving, you can make revisions to your profile if need be. If your profile is “being tracked” by an investor, they will be alerted that you have changed your profile. You can declare a change as being an: Update; Revision; or Pivot. You’re probably now ready to research the Ambassadors that sponsor the networks where you have published your profile and if need be, con- sider publishing in additional networks.

You can noodge an Ambassador’s circle members. After you are sure that your company meets an Ambassador’s application criteria, if your profile is published in one or more of the networks that they sponsor, you can noodge their circle members and/or apply directly.

A NOODGE is a way of encouraging an ambassador’s circle members to read your profile and then collaborate with each other.

The DIRECT APPLY feature is intended to compel that organization’s private screening committee to review your deal. We offer the direct apply option to help organizations that curate deals, form consensus.

Ambassadors that are clubs and professional associations generally form open circles. Ambassadors that are investment firms (i.e. angel and venture funds) generally form private circles. Many Ambassadors also host Programs which you can apply to as well. Keep in mind that investors can collaborate with anyone in the networks they have joined, but they can only refer deals to the members of their circles. If an Ambassador has an AngelRoot circle, you can ask all of their members to read your profile by Noodging them, but please do not noodge everyone. The platform limits how many times you can “noodge” in any given week. Please don’t be a noodge when you noodge. A “being noodged” flag will appear alongside your profile on each circle member’s Discover page.

You can also apply directly. If an Ambassador is offering an APPLY DIRECTLY option that means that they have a more formalized screening process to curate deals. For example: VC and Angel Funds utilize screening committees; programs such as business plan competitions utilize judges. We offer Ambassadors a number of ways in which they can ask startups to apply directly. Some will have you apply directly on AngelRoot; others on their own web site or through third party software that they may utilize, such as Gust or ProSeeder. We will work on APIs to save you the extra key strokes. Bear in mind, some Ambassadors charge application screening fees. If AngelRoot has been asked to handle payment processing, we will retain 10% of the fee collected on the Ambassador’s behalf. Generally speaking, if you apply directly, assuming of course that your profile meets their criteria, it compels the Ambassador’s screening committee to read your profile. Ambassador screening committees members very rarely screen the same stratup more than once, so be sure that you are ready before applying.

When writing your executive summary, keep in mind that most Ambassadors utilize a formal screening process. The following criteria are often used when investors screen deals. We have included many of these as criteria in the rating section.

Purpose: The company’s purpose/vision is clear, understandable, original and compelling.

Target customer: The target customer has been clearly identified, carefully chosen and the company has the ability to reach and retain them.

Opportunity: The opportunity has been realistically defined and is substantial / the addressable market is a significant one and the target customer that the company has identified has a real and solvable problem

Product/Service: The product or service provides a meaningful and enduring benefit to the target customer and has significant competitive advantages.

Business Model: The business model has been evaluated comprehensively, articulated clearly and thoughtfully developed. The business is sustainable, operationally feasible, financially attractive and scalable.

Landscape: The company is cognizant of its landscape. The regulatory, tax, social, political and industry environments are all favorable.

Competitive: Market entry is posible. The company can withstand competitive pressure.

Milestones: The company has identified measurable and achievable milestones and the capital being raised seems sufficient to achieve the milestones.

Projections: The financial projections seem realistic and achievable.

Culture: Since inception, the company has spent money frugally and wisely.

Business Risk: The company has identified major and relevant business risks and the ratio of business risk to reward is attractive.

Team: The team has sufficient expertise to manage the business in the current stage of their business cycle and/or they have addressed the need for additional key people and the strategies to attract and retain these individuals. The team is both nimble and thoughtful (i.e. the team will be quick to respond when changes may be necessary to their plans but they will not make changes without careful consideration).

Presentation: The executive summary demonstrates the team’s ability to be disciplined and focused.

Stewardship: The team seems well balanced so far as zeal and objectivity. The team will be excellent stewards of other people’s money.

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You can answer all or some of the questions on the profile form, upload documents, presentations, provide screen shots, photos, links and videos. And, you can edit and save your profile as often as you like. It will not become discoverable until you submit it. Once you submit it, the investors and mentors who have joined the networks where your profile is published will be able to review, rate and make comments. You can continue to revise your profile as often as you like. If an Ambassador invites you to apply through third party deal-management software that they may be using, don’t worry, we’ll be working on APIs to save you the extra key strokes.

There is a one-time application fee when Companies and Pre-Companies submit their profiles. Application fees are based on the stage of your company or pre-company’s business cycle. Even though application fees are minimal (as low as $25 for pre-revenue Pre-Companies and $100 for pre-revenue Companies), they will be waived or reduced for pre-revenue Companies in instances where they present a financial hardship. Companies should fill out our short, confidential financial aid application when they submit their profiles to determine eligibility. Moreover, Ambassadors that are not-for-profits will be issued referral codes for their programs. If the referral code is used when a Company or Pre-Company originally submits its profile, the AngelRoot application fee will be fully waived and the startup will automatically be enrolled in that program.

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