Transcript Crossroads Institute Gary Larrowe Extension Specialist VA Tech Fund Goal: $1,000,000 25-40 investors Minimum investment required $500,000 to complete fund.

Crossroads Institute
Gary Larrowe
Extension Specialist
VA Tech
Fund Goal: $1,000,000
25-40 investors
Minimum investment required $500,000 to complete
fund.
Individual Investment
Minimum Investment
$10,000
Maximum Investment $100,000
10% due with subscription
 Balance or part of balance due when
capital call is made by the Company.
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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.
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Startup Companies
Companies less than one year old
Companies one to five years
Companies five years plus
10x
6x
5x
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
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Will consider various growth stages of a business:
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Seed, Early Stage, Start-Ups, Expansions, Owner Transitions
Primary Investment Region:
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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
Management
Members
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Investment Decisions
Elect Board of Managers
One vote per share
Assist with deal flow
Due Diligence
Board of Managers
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Direct Due Diligence on
investment opportunities
Decision makers for the
Company
Elected by the Members
Officers
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Elected by the Board of
Managers
Day-to-Day mgmt
responsibilities
Crossroads Institute
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Administrative Support
Board of Managers:
Cross Section of Disciplines
Financial/Banking
Accounting
Legal
Operations
Marketing
Human Resources
Risk Management
Medical
Industry Expertise
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Advanced
Manufacturing
Technology
Distribution
Warehousing
Due Diligence
Crossroads Institute
Administrative Support
Call meetings
 Assist Officers and Board of Managers
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Coordinate Due Diligence Efforts
Assist with preliminary research
 Resources for research
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Assist in other areas as needed
Stimulate Deal Flow
Critical Functions
Deal Flow
Crossroads Entrepreneurs
Establish connections with
other Venture Funds and Firms
Venture Capital Firms
MEMBERS
Due Diligence
Team 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