| 1. Why doesn't AA Capital sign Nondisclosure Agreements?
Like the majority of VC's, we do not sign NDA's because it would open us up to potential litigation and would seriously limit the number and type of deals we may want to evaluate for our portfolio.
2. What are AA Capital’s criteria for investment in my company?
AA Capital invests in promising companies in a broad section of industries. Specific investment criteria can be viewed here. Please review it thoroughly before submitting an investment proposal to us.
3. What is the process after I submit my executive summary for review?
After we receive your executive summary, one of AA Capital’s associates and/or partners will review and evaluate your opportunity for investment. If we determine your opportunity is not a good fit, we will inform you that we are not pursuing an investment. If we determine that your opportunity may be a good fit, we will contact you to request more information (often a full business plan, management resumes and any other relevant information). If we are interested in learning more after reviewing this information, we will setup a conference call or face-to-face meeting to get to know you, your team and your opportunity in more detail.
4. What type of exit strategy is AA Capital looking for?
AA Capital’s preferred exit strategy depends on what is most suitable for your company and can include an initial public offering (IPO).
5. What do you consider an attractive time period for a company's exit strategy?
Like most VC's, AA Capital is looking for companies that can reach an exit event in 2 to 5 years.
6. Can I raise venture capital if all I have is an idea?
Raising venture capital with just an idea has become very difficult, especially after the burst of the .com bubble. Most traditional venture firms will focus on companies that have established operations and management and have developed or completed its products or services. Raising capital for an idea-only business almost always requires soft money from Angel investors, which is typically accomplished through a private placement. Entrepreneurs with companies at seed-stage can still be helped however it often an expensive and lengthy process.
7. Do you invest in public companies?
AA Capital does not invest in public companies.
8. How much equity does AA Capital require for an investment?
It depends entirely on the amount of the investment, the valuation of the company, the stage of the company, the future potential for growth and the proposed exit strategy. Our best investments have been those where the founders and management of the company had majority ownership.
9. Does AA Capital participate on my Board of Directors?
We typically take a board seat if we lead the investment.
10. What is AA Capital s Management Involvement?
We're not bankers, lawyers or financial sharks interested in taking over your company. We're entrepreneurs turned venture capitalists with extensive operating experience. We think like you, work with you and support you by taking an active role in management and the board without limiting your overall control.
11. What type of return is AA Capital looking for?
At liquidation (merger, acquisition, IPO or buy-back), most early-stage VC firms are looking for returns of about 5 to 10 times of their investment. While returns vary by industry and deal structure, a company with lower than 3 x returns on investment will have difficulty obtaining venture capital and should consider alternative funding sources.
12. Are investments by AA Capital debt or equity based?
We primarily make equity or debt/equity investments. We are not lenders and do not participate in debt-only investments. If you are looking for a debt-only investment you should probably consider other ways of raising capital.
13. Do you invest in young, but more developed companies?
Yes. Most of our venture capital investments are made in young and growing companies that are already operating and generating revenue. We also participate at the Series B and C level, but typically have no interest in mezzanine financings.
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