Value Proposition

Value Proposition

What is a value proposition?

A marketing statement that presents the value a startup promises to deliver with its product.

For The Angel Investing School, the value proposition promises to teach you the basics of how to find and invest in startups in the UK.

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Valuation

Valuation

What is a valuation?

An estimate of how much a business, property, art or any asset is worth.

For valuing startups, things differ as many times they are pre-revenue and there are several methods investors use such as comparing against existing companies who are similar or discounted cash flows which looks at a companies potential.

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Validation

Validation

What is validation?

Prove market need through gathering more evidence over time such as 6 months of continued increase in monthly active users.

If a landing page is created whereby users could submit their name and email address to the website based on a one line description. That validates demand for the promise presented by the companies value proposition.

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Unicorn

Unicorn

What is a unicorn?

A privately held startup company valued at over £1 billion.  Defined in 2013 by a VC named Aileen Lee.

Monzo, the mobile banking app is valued at over £2 billion and is therefore a unicorn.

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Uncapped Note

Uncapped Note

What is an uncapped note?

Uncapped means there is no valuation ceiling on the convertable note.

An uncapped round is more favorable to the founder as it means that the investors get no guarantee of how much equity their money purchases.

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Vesting

Vesting

What is vesting?

A clause to give or earn a right to a present or future shares in a startup.

A 4 year vesting schedule means that if you leave the startup in year 2, you will not receive the full value of all your shares as you did not stay for 4 years.

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Term Sheet

Term Sheet

What is a term sheet?

Non-binding agreement outlining the conditions of an investment.

Usually the lead investor in a funding round presents the term sheets all the other investors agree to.

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Startup

Startup

What is a startup?

New business/ company in its early stages of operations.

According to The Telegraph in 2019, there was 70 startups registered on companies house every hour.

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Social Enterprise

Social Enterprise

What is social enterprise?

Companies with a societal and/ or environmental mission for good and when they profit, society profits.

Café direct is a 100% fair trade coffee company that invests half of its profits back into farmer communities.

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Shareholders Agreement

Shareholders Agreement

What is a shareholders agreement?

An agreement that outlines shareholders’ rights and obligations.

Funds range from £20M – £80M, similar to Series B the funds are used to fuel growth plans from hiring to investing in more tech.

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