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Crossroads Institute
Gary Larrowe
Extension Specialist
VA Tech
Fund Goal: $1,000,00025-40 investors
Minimum investment required $500,000 to complete fund.
Individual Investment
Minimum Investment $10,000
Maximum Investment $100,000
10% due with subscriptionBalance or part of balance due when
capital call is made by the Company.
Current Indications of Interest
Several Individuals in Carroll County have been used as barometers of
interest with positive feedback
Closing fund at $1.5 million or October 31, 2004 whichever comes first!
Crossroads Venture Capital Fund, LLC
Formal Investment Fund
Aggregate Intellectual & Financial Resources
Comprised of Accredited Investors
Managed by formal Board of Managers
Investment Motivation
1. Return on Investment
2. Angel Investor opportunities
3. Economic Development
4. Reduce Risk
5. No Sales Commission or other Dilution of Investment and possible tax credits
Investment Motivation
6. Limited Management Expenses, more in early years during due diligence
7. Some Legal and Accounting
8. Local Control
9. Regional Economic Power
Return on Investment
Ideally, the angel fund will have a blended portfolio and receive a weighted return of up to 20% compounded annually.
Expectations for Return on Investment within 5 years.
Startup Companies 10x Companies less than one year old 6x Companies one to five years 5x Companies five years plus 3x
Life of Fund
Will invest all funds less a reserve for operating expenses
Investment period 2-4 years
Expected term 5-7 years
End of term, close fund and disburse remaining assets
Open new fund if necessary
Crossroads Venture Capital Fund, LLC
Investment Focus to be Determined by Members:
Will consider most industries to include: Manufacturing, Technology, Life Sciences, Warehousing and Distribution
Will consider various growth stages of a business: Seed, Early Stage, Start-Ups, Expansions, Owner Transitions
Primary Investment Region: Service area of Crossroads Institute
Will consider investments outside the region.
Crossroads Venture Capital Fund, LLC
Investment Expenses to be Determined by Members:
Will consider reimbursement fee for due diligence efforts of members ( Preferably Non Cash: stock options or % of deal )
In some cases may hire due diligence to be performed
Goal to limit expenses to increase return on investment
ManagementMembers Investment Decisions Elect Board of Managers One vote per share Assist with deal flow Due Diligence
Board of Managers Direct Due Diligence on
investment opportunities Decision makers for the
Company Elected by the Members
Officers Elected by the Board of
Managers Day-to-Day mgmt
responsibilities
Crossroads Institute Administrative Support
Board of Managers: Cross Section of Disciplines
Financial/Banking
Accounting
Legal
Operations
Marketing
Human Resources
Risk Management
Medical
Industry Expertise Advanced
Manufacturing Technology Distribution Warehousing
Due Diligence
Crossroads Institute
Administrative Support Call meetingsAssist Officers and Board of Managers
Coordinate Due Diligence EffortsAssist with preliminary researchResources for research
Assist in other areas as neededStimulate Deal Flow
Critical Functions
Deal FlowCrossroads EntrepreneursEstablish connections with other Venture Funds and FirmsVenture Capital Firms
MEMBERS
Due DiligenceTeam Approach
Board of Managers and Members
Outside Expertise
Due Diligence Work Plan
Next Steps…
Within three months: Complete and Sign Subscription Agreement return with check for 10% of subscription amount to the Crossroads Institute
Close Private Placement Offering Memorandum 10/31/04 or at $1.5 million
Annual Meeting to Elect Board of Managers 11/04
Cash Checks 11/04
Begin Deal Flow
www.CrossroadsVA.org