Approach

Investment Philosophy

The goal of Sorin Angel Capital Fund IV is to produce a high return by making minority equity investments in a portfolio of ten (10) to thirteen (13) scalable seed stage technology companies that are applying technology in transformational ways to disrupt established markets.

<a href="#companies">Companies within Our Philosophy</a> <a href="#philosophy">Portfolio Investment Philosophy</a><a href="#angel">Angel Group Affiliations</a><a href="#criteria">Evaluation Criteria</a><a href="#succession">Succession Planning & SEC Registration</a>

Testimonial

Jim and the folks at Sorin Capital have been a pleasure to work with. As an early stage company we need investment partners that understand our stage, and have the patience and foresight to look at the big picture. Jim was instrumental in helping us raise an oversubscribed seed round that allowed us to raise twice as much capital as we had been targeting. This will give us substantially greater runway and will make a huge difference in our near term goals.

Bo Davis, CEO, MarginEdge

This philosophy is largely based on Sorin Angel Capital’s experience with his previous 31 investments since 2013, as well as his other entrepreneurial ventures since 2001, and is a reflection of the types of businesses that:

are well represented in the deal flow to which the Fund is exposed,
have the possibility of 10X returns in the prescribed timeframe, and
are within Sorin Angel Capital’s ability to thoroughly understand and evaluate.

Examples of the types of companies that fall within and outside of this philosophy are shown on the following table:

<table><tbody><tr><th colspan="2">Within the Philosophy</th><th colspan="2">Outside of the Philosophy</th></tr><tr><td><b>Type</b></td><td><b>Examples</b></td><td><b>Type</b></td><td><b>Examples</b></td></tr><tr><td>The Internet of Things</td><td>Vagabond Vending, Zagster, Brain Sentry, Aquicore, CargoSense Eyelation</td><td>Restaurants</td><td>My Burger</td></tr><tr><td>Marketing and Social Media Marketing</td><td>InGo, YaSabe, Loop88 (PinBooster), Bubbl, Vennli</td><td>Food/Liquor</td><td>Tico Libre, Hatfield & McCoy, Relay Foods, Daily Serving</td></tr><tr><td>Real Estate Technology</td><td>Rentlytics, Aquicore</td><td>Life Sciences or Medical Devices</td><td>Vagogenix, Neoantigenics, NanDio</td></tr><tr><td>Financial Technologies</td><td>StreetShares, TradingView</td><td>Education Technology</td><td>Naaya, LessonCast</td></tr><tr><td>Internet</td><td>Blue Triangle, Technologies, DivvyCloud</td><td>Unapplied Technologies</td><td>NanoFoundry</td></tr><tr><td>SaaS Applications, primarily but not exclusively B2B</td><td>RIVS, AppCast, HomeCare</td><td>Consumer Goods</td><td>SoapBox</td></tr><tr><td></td><td></td><td>Retail Stores</td><td></td></tr><tr><td></td><td></td><td>Entertainment, Movies or Plays</td><td>Rivet Radio, Circle Media</td></tr><tr><td></td><td></td><td>Games</td><td>North Star Games</td></tr><tr><td></td><td></td><td>Fashion</td><td>Ash &Anvil</td></tr><tr><td></td><td></td><td>Social Impact</td><td>Keeping The Faith, Grounds & Hound</td></tr></tbody></table>

Portfolio Investment Philosophy

Sorin Angel Capital’s experience over the past three (3) has resulted in a better understanding about the ideal pre-conditions that a company should meet to reduce the risk of an already risky investment decision.

The table below outlines the ideal pre-conditions that investments in Sorin Angel Capital Fund IV will meet in order to qualify for consideration to become part of the portfolio. Investors should recognize that the conditions below describe an ideal that is unlikely to be universally applicable to all investments made.

Any one of these pre-conditions may be overridden if others are overwhelmingly encouraging; however, it is the clear intent of Mr. Koehr to ensure that every portfolio company substantially meets the following pre-conditions prior to investment:

<table><tbody><tr><th><strong>Within the Philosophy</strong></th><th><strong>Outside of the Philosophy</strong></th></tr><tr><td>Done in conjunction with the collective wisdom of others, particularly the IrishAngels and the New Dominion Angels</td><td>Lone Ranger investments where Sorin Angel Capital is the sole evaluator outside the context of an investment group or other team.</td></tr><tr><td>A Board of Directors is in place, ideally with a member that Sorin Angel Capital knows personally</td><td>Lone Ranger Entrepreneur(s)</td></tr><tr><td>Possible to envision a 10X Return</td><td>Non-Scalable or High-Touch</td></tr><tr><td>Some customer has paid full-price</td><td>Very early offerings yet to be validated by the market</td></tr><tr><td>Easy to see a planned 3 to 5 year exit</td><td>Planned exit of greater than five (5) years or limited exit possibilities</td></tr><tr><td>Very large addressable market</td><td>Cannot see the company being over $25 million in revenue in 5 years</td></tr><tr><td>At least 20 hours of due diligence with people knowledgeable about the industry involved</td><td>Deals outside of investment groups where complete due diligence cannot reliably be completed by knowledgeable trusted people</td></tr><tr><td>A team with entrepreneurial experience or significant corporate experience within the domain</td><td>College kids with no other real work experience or Entrepreneurs who have only worked for the Federal Government</td></tr><tr><td>Low Capital and Working Capital Requirements</td><td>Capital or inventory intensive businesses</td></tr><tr><td>Recurring revenue</td><td>Non-recurring revenue</td></tr><tr><td>Reasonable Valuations, generally less than $6 million</td><td>Uncapped Convertible Notes or Valuations over $10 million</td></tr><tr><td>Based in the United States</td><td>Based outside of the United States</td></tr><tr><td></td><td>Advisory Board is very negative on the opportunity</td></tr></tbody></table>

Angel Group Affiliations

New Dominion Angels (NDA)

The stated purpose of the northern Virginia-based New Dominion Angels is “Accelerate the region’s emergence as a hub of innovation and entrepreneurship. We support early-stage companies in Virginia and the region, positively impacting communities through well-vetted investments in extraordinary entrepreneurs and their promising ventures”

The NDA investment strategy aligns very closely with the philosophy of Fund IV but with an emphasis on seed stage companies in Virginia and the surrounding region.

newdominionangels.com

IrishAngels (IA)

The stated mission of the IrishAngels is to “Marry our passion for Notre Dame with our collective entrepreneurial urge and instincts, to find and fund the most promising ND affiliated new ventures resulting in a Chicago-based, nationally inspired angel investing brand.”

Again, the IA investment strategy aligns very closely with the philosophy of Fund IV but with an emphasis an affinity network of trusted Notre Dame Alumni.

irishangels.com

Finding the best possible portfolio companies for Fund IV will require Mr. Koehr to take full advantage of his widening network in the Angel investment community, so investments for Fund IV will not be limited to these two primary affiliations.

During the course of the execution of Fund IV, other affiliations are certainly likely including the following:

Middleburg Capital Development (MCD)

MCD, based in Middleburg, VA, is run by Notre Dame Trustee and Fellow Tim Sutherland and his son David Sutherland.

Mr. Koehr serves on their Advisory Board and has cooperated in several deals with them in the past including Vagabond Vending and CargoSense.

MCD has a broader mission than the more targeted Angel Investment groups: “We partner with entrepreneurs, growing businesses, private banking groups, university incubation centers, funds, and other private equity groups.”

mcapd.com

Center for Innovative Technology (CIT)

CIT is a non-profit corporation created by the State of Virginia that “creates technology-based economic development strategies to accelerate innovation, imagination and the next generation of technology and technology companies” in Virginia.

CIT runs a series of CIT GAP Funds to fill the funding gap for high potential Virginia-based technology companies.

The northern Virginia-based CIT GAP Funds are run by Tom Weithman, Notre Dame Class of 1984, so there have already been several cooperative investments between the New Dominion Angels, the IrishAngels and CIT.

cit.org/service-lines/cit-gap-funds/

Blu Venture Investors

Blu Venture Investors is a venture capital investment company that supports early stage entrepreneurs in the Mid-Atlantic Region – Maryland, Virginia, Washington, DC and North Carolina.

Blu has already overlapped with Sorin Angel Capital, the New Dominion Angels and the IrishAngels on numerous deals.

bluventureinvestors.com

Evaluation Criteria for Investment Decisions

A still evolutionary part of the Fund’s business process is a formal methodology for evaluating investments, beyond simply evaluating necessary pre-conditions. The following criteria are based on the New York Angels Screening and Evaluation Worksheet plus the personal experience of the Jim Koehr. This draft criterion is anticipated to evolve as they are methodically applied to Fund IV investment decisions. For today, there is no particular threshold result that must be achieved with the criterion below. The criterion are simply presented as an early draft of a possible scoring system that may or may not evolve into something more than a subjective checklist against which investment decisions will be evaluated:

1. Strength of Management Team – 30%

a. Founder’s business experience
i.	Wonderful	Wonderful – Clearly a veteran CEO with enormous competence
ii.	Great	Experience as a CEO
iii.	Good	Experience as a COO, CTO or CFO
iv.	Acceptable	Many years of experience as a Product Manager or Technologist
v.	Poor	Many years of business experience
vi.	Unacceptable	Straight out of school

b. Founder’s domain experience
i.	Wonderful	This business is a virtual repeat of a prior business
ii.	Great	Successful experience in the space
iii.	Good	Experience is directly analogous space
iv.	Poor	New Entrant into the space

c. Willingness to step aside, if necessary, for a new CEO
i.	Great	Understands the possibility and a strong Board capable of doing it
ii.	Good	Understands the possibility and Board probably capable of doing it.
iii.	Acceptable	Not openly unwilling but Board capable of doing it
iv.	Unacceptable	Reluctant and no Board capable of doing it

d. Is the Founder coachable?
i.	Great	Demonstrated coachable
ii.	Good	Appears coachable
iii.	Acceptable	May be Coachable
iv.	Unacceptable	Openly shows signs of being uncoachable

e. How complete is the management team?
i.	Wonderful	A complete and experienced management team
ii.	Good	A mostly complete team with some strong leaders
iii.	Acceptable	A strong leader with a good start assembly a team
iv.	Poor	A somewhat incomplete team
v.	Unacceptable	A very incomplete team

2. Product or Service – 20%

a. How well is the product/market defined
i.	Great	Extremely clear, focused and succinct
ii.	Good	Clear, focused and succinct
iii.	Acceptable	Some definition, but needs focus
iv.	Poor	Poorly defined

b. Is the product or service compelling?
i.	Great	Product is a pain-killer with no side effects
ii.	Good	Product is a pain-killer with no side effects after further development
iii.	Acceptable	Product is a pain-killer
iv.	Poor	Product is a vitamin

c. What is the path to acceptance?
i.	Wonderful	Product is incredibly easy to understood and adopt
ii.	Good	Product is an easily understood and adopted improvement
iii.	Great	Product is an innovative approach that will be reasonable to adopt
iv.	Acceptable	Product is an innovative approach to a known market
v.	Poor	Product defines a new industry category

d. Can the product or service be easily copied?
i.	Great	Solid, issued patent protection
ii.	Good	Product is unique and protected by trade secrets, parts are patentable
iii.	Acceptable	Duplicated or replaced with great difficulty
iv.	Poor	Duplicated or replaced with some difficulty
v.	Unacceptable	Easily copied

3. Size of Opportunity – 20%

a. Size of the addressable market for the company’s product or service
i.	Wonderful	> $1,000,000,000
ii.	Great	> $500,000,000
iii.	Good	> $100,000,000
iv.	Acceptable	> $50,000,000
v.	Unacceptable	< $50,000,000

b. Potential Revenues in five (5) years
i.	Wonderful	> $100,000,000
ii.	Great	> $75,000,000
iii.	Good	> $50,000,000
iv.	Acceptable	> $25,000,000
v.	Unacceptable	< $25,000,000

c. Strength of Competition in this marketplace
i.	Great	Almost none, yet
ii.	Good	Weak or indirect
iii.	Acceptable	Modest
iv.	Poor	Strong

d. Exit Possibilities
i.	Wonderful	They have already been put under NDA for a plausible exit
ii.	Great	Very easy to see possibilities, including the chance for an early exit
iii.	Good	Multiple plausible exit opportunities in 3 to 5 years
iv.	Poor	Limited exit opportunities, but planned for 3 to 5 years
v.	Unacceptable	Unclear exit opportunities or a planned exit that exceeds 5 years.

4. Sales Channels – 10%

a. How strong are the sales channels
i.	Wonderful	Multiple channels established and moving product
ii.	Great	Channels established and moving product
iii.	Good	Initial channels verified
iv.	Poor	arrowed to one or two channels
v.	Unacceptable	Channel strategy not yet established

5. Stage of Business – 10%

a. How much has this business been validated by the market
i.	Wonderful	A wide variety of customers generating significant revenue
ii.	Great	Customers generating significant revenue
iii.	Good	Positive, verifiable acceptance
iv.	Poor	Product in Beta
v.	Unacceptable	Product not ready to market, in prototype or only planned

b. Size of This Investment Round
i.	Wonderful	The entire round is taken by a single Sorin affiliated Angel group
ii.	Great	$250K to $750K
iii.	Good	$750K to $1,500K
iv.	Acceptable	$1,500K to $2,500K
v.	Unacceptable	> $2,500K

c. Need for Subsequent Funding
i.	Good	None
ii.	Acceptable	Less than $3 million
iii.	Poor	$3 to $10 million
iv.	Unacceptable	Over $10 million

6. Other Factors – 10%

a. Quality of Business Plan and Presentation
i.	Wonderful	Incredibly compelling, one of the best I’ve ever seen
ii.	Great	Clear, compelling and convincing
iii.	Good	Excellent
iv.	Acceptable	OK
v.	Unacceptable	Poor

b. Burn Rate
i.	Wonderful	Cash flow positive with this this round
ii.	Great	Cash flow positive possible, if necessary, with this this round
iii.	Good	More than 18 months of runway
iv.	Acceptable	More than 12 months of runway
v.	Unacceptable	Less than 12 months of runway

c. Attractiveness of Deal Terms
i.	Wonderful	Low Valuation, Preferred Stock with uniquely good terms (i.e. Warrants or 2X liquidation preference)
ii.	Great	Good Valuation, Preferred Stock with uniquely good terms (i.e. Warrants)
iii.	Very Good	Good Valuation, Preferred Stock with liquidation Preference
iv.	Very Good	Convertible Note with low cap and uniquely good terms
v.	Good	Valuation Not Low but Preferred Stock with liquidation preference
vi.	Poor	Unreasonably High Valuation or Note Cap
vii.	Unnaceptable	Unreasonably High Valuation or Common Stock

Succession Planning

Given that the Fund Manager, Sorin Angel Capital, LLC, is a sole-member LLC with James G. Koehr as the sole member, the Operating Agreement for Sorin Angel Capital Fund IV, LLC contains provisions for a successor Manager of Sorin Angel Capital, LLC in the event of Mr. Koehr’s death or incapacity.

In those extraordinary cases, William T. Patchett, CPA, will assume the role of Managing General Partner as a result of his appointment as the Managing Member of Sorin Angel Capital, LLC. At that time, Mr. Patchett will not make any new Capital Commitment Calls nor will the Fund make any new investments beyond any unconsummated obligations committed to by Mr. Koehr while he was still the Manager. Mr. Patchett’s role will simply be to monitor the investments and disburse earnings per the Agreement.

SEC Registration

Sorin Angel Capital Fund IV will exercise its exemption from Registration with the Securities and Exchange Commission (SEC).

Fund offerings were conducted under an exemption from registration under Section 4(2) of the Securities Act and Rule 506(c) of Regulation D promulgated under that Act.

The Units were offered and sold only to “Accredited Investors” as defined under Regulation D.

Prospective investors were required to provide any information that Sorin Angel Capital Fund IV or its manager believed was necessary to verify their status as Accredited Investors.