Walnut Venture Associates Questions

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Walnut Venture Associates: Case Questions (HAND-IN)

(1)Angel investors are affluent individuals who provide capital(money) for a business start-up. Angel investors usually receive convertible debt or ownership equity in return for their investment. Angel investors are different from venture capitalists since angels typically invest their own funds meanwhile venture capitalists manage pooled money of others in a professionally-managed fund. There are 2 forces exacerbating the trend towards the prominence of angel investing which include the fact that a generation of entreprenuers had “cashed out” and were looking to utilize their wealth and expertise by investing in start-ups, and that venture capitalists usually deployed capital in larger amounts that $1 million or below.

An entrepreneur would seek financing from an Angel because Angels not only have the money to help finance the company, but they also have knowledge and experience that is very helpful to start-ups. The experience and track record of Angels (who usually have started their own company, served as a CEO, etc) is an asset that can’t be matched by a venture capitalist. Part of the reason of this again is because the Angel investor is investing his or her own money, something that will truly incentivize the Angel do to everything in his or her power to make the company succeed. 1) What is your first impression about the RBS opportunity based on the business plan?
My first impression about the RBS opportunity based on the business plan is that it looks like a very promising investment. RBS has a very detailed business plan that outlines the long-term goals of the company and also includes the previous successes that is has seen. The market is growing at a fast rate, and it seems as if RBS has truly established a competitive advantage over its competitors, which is something that is extremely…...

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