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Angelinvestmentisacommonsecondroundoffinancingforhigh-growthstart-upsandaccountsintotalforalmostasmuchmoneyinvestedannuallyasallventurecapitalfundscombined.Comparedwithventurecapitalangelsinvestaboutthesameamountoffundingintentimesasmanycompanies.Angelcapitalfillsthegapinstart-upfinancingbetweentheinitialfounderfriendsandfamilyfundingandventurecapital.Whileitisusuallydifficulttoraisemorethan100000fromfriendsandfamilymosttraditionalventurecapitalfundsareusuallynotabletoconsiderinvestmentsunder2million.Thusangelinvestmentisacommonsecondroundoffinancingforhigh-growthstart-upsandaccountsintotalforalmostasmuchmoneyinvestedannuallyasallventurecapitalfundscombined.Comparedwithventurecapitalangelsinvestaboutthesameamountoffundingintentimesasmanycompanies.Angelinvestmentsrepresentextremelyhighriskandrequireahighreturnoninvestment.Becausealargeandanticipatedpercentageofangelinvestmentsarecompletefailuresprofessionalangelinvestorsseekinvestmentsthathavethepotentialtoreturnatleast10ormoretimestheiroriginalinvestmentwithinfiveyearsthroughadefinedexitstrategysuchasplansforaninitialpublicofferingoranacquisition.Thisapproachallowsthefewwinnerstooffsetthelargernumberoflosers.ATermSheetisadocumentoutliningthematerialtermsandconditionsofabusinessagreementsubjecttotheinvestorssatisfactionwiththemeritsofthedealbasedupontheinvestorsresearch.TheTermSheetprovidestheinvestorwithanexclusiveperiodoftimetoinvestigatethemeritsoftheinvestmentandrestrictstheentrepreneurfrommarketingthedealtootherinvestors.SubjecttotheinvestorssatisfactionwiththeinvestigationtheTermSheetthenguidestheinvestorslegalcounselinthepreparationofaproposedfinalagreementwhichultimatelyissubjecttonegotiationbetweentheinvestorandtheentrepreneur.Duediligenceisaprocessofinvestigationusingastandardofcaretosystematicallyanalyzeaninvestmentopportunity.Aprivateequityinvestmentduediligenceapproachutilizesmultiplelevelsofinvestigationbeginningwithaninitialscreeningthatsimplyidentifieswhethertheinvestmentopportunitymeetsfundamentalrequirementsforaprivateequityinvestment.Afteraninitialmeetingbetweentheinvestorandentrepreneurasecondmoreindepthlevelofduediligenceresearchestheventuredevelopmentstrategiesclaimsandassumptionsmadeinthebusinessplan.FinallyexecutionofaTermSheetresultsinafinallaborintensiveextensiveandcostlyinvestigationthatconsidersallaspectsoftheexecutionproductmarketmanagementandfinancialrisksandrequirementsassociatedwiththeventureinvestment.AprivateplacementmemorandumPPMisthedocumentthatdisclosesallpertinentinformationtotheinvestorsaboutthecompanyproposedcompanyoperationsthetransactionstructurethetermsoftheinvestmentsharepricenoteamountsmaturitydatesetc.riskstheinvestorsmayfaceanddescriptionoftheinvestmentopportunity.TheSubscriptionAgreementsetsforththetermsandconditionsoftheinvestment.Itisthesalescontractforpurchasingthesecurities.Itistheoppositeofapublicoffering.Privateplacementscanonlybesoldtocertainsophisticatedinvestors.TheseinvestorsarecalledaccreditedinvestorsandtheyaredefinedintheU.S.SecuritiesandExchangeCommissionsrequirementsforaRegulationDoffering.TheprocedureforconductingaprivateplacementpursuanttotheexemptionislessstringentthanforthepublicrestrictionsofRegulationD.Issuersshouldcautiouslyapproachofferingsthathavestatedmaximumsandminimums.IftheissuerelectstoincreaseordecreasethesizeoftheofferingabovethestatedmaximumandminimumsizeofthecapitalraisedortochangethesharepriceoftheofferingtheSECrequiresthateachoftheinvestorswhohavesignedsubscriptionagreementsmustconsenttothechangeinwriting.www.technologyalliance.ms11TermSheetDueDiligencePrivatePlacementMemorandum