Monday, December 31, 2012

MedHab Raising Funds via Gust

MedHab is in their third capital raise according to SEC documents.  The company is listed on GUST, a website that matches angel investors with firms needing capital.  Gust, formerly AngelSoft, was renamed in September 2011.

Early MedHab funding came from the Concho Valley Angel Network.  GUST had this to say about our local angel funder:

Exit strategy. Our members typically seek returns of at least ten times their initial investment within seven years. This level of return on investment is essential due to the high risk and likelihood of failure among early stage ventures. Thus, a clearly articulated exit strategy - how angel investors will extract such returns - is essential. For example, do you plan to sell the company to an established corporation in your industry? Or, will your exit be through subsequent rounds of financing - venture capital or the public markets? Angel investors are not just interested in the strategy you select, but more importantly in the how - the operational strategy that shows specific steps you will take to achieve the exit.

Concho Valley Angel Network Expects Their Investments To Generate

  • Expected Revenue By Year 5: USD10,000,000 - USD50,000,000
  • Expected Returns: 10x Investment - 30x Investment
  • Expected Years to Exit: 2 Years - 7 Years
  • Expected Years to Break Even: 1 Year - 3 Years
The site matches private money with companies needing seed capital.  A year ago the City of San Angelo offered MedHab a $3.6 million economic incentive to setup a production facility.  In August MedHab agreed, promising 3 to 11 jobs by year end.  So far city leaders have been silent on MedHab's performance.  Maybe the new year will bring information in this regard?  One can hope.

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