Post a new topic
    24 Replies Latest reply on Dec 20, 2008 9:35 AM by NoBullFunding

    Angel Investors, Post HERE!

    NoBullFunding Scout
      Every other post on this forum is looking for angel investors, yet I don't think I've seen or heard of any deals consummated. If there is anyone out there who likes to invest in startup retail establishments, this is the time to speak up.

      If you are an investor, please share some info about yourself. Are there specific businesses that you invest in? What criteria do you use to make an investment? What kinds of fees do you charge for your investment? Are there upfront fees? Basically, show the world that you are on the "up and up" and aren't simply looking to fleece unsuspecting entreprenuers.

      I personally think Angel investors for small businesses are an urban finance legend that aspiring entreprenuers like to pin their hopes and dreams on. With 99.99% of businesses, the risk outweighs the rewards (in terms of a monetary investment), and savvy investors know that which is why they don't invest in small business startups. I guess we'll see if I'm right or wrong on this issue...
        • Re: Angel Investors, Post HERE!
          Iwrite Pioneer
          I believe they exist and even know a couple. But I also know if they have any sense they will not respond to this post for fear of opening the flood gates of requests.

          Look at what happens when someone posts that they can get loans. Look at both the number of reads and the number of posts when they say that.

          Just because they don't want every Tom, Dick and Harry beating their door down doesn't mean they are not legit. Ask the question another way: "Is there anyone on this forum who has or is working with an angel investor?"

          I have a client who is not a member of this forum who has just secure $3 million from an investor. This company is a start-up by anyone's description, two guys working out of the kitchen of one of their homes.

          You are right, there are a lot of scammers on this forum.
            • Re: Angel Investors, Post HERE!
              NoBullFunding Scout
              Good points, Iwrite.

              Your example of a client securing $3MM fron an investor illustrates my point that it is quite possible for a "middle market" type deal to get funded. The main thing that I was driving at is that investors don't have much of an interest in small business startups, especially the types of businesses that I see on this forum that want an investor. Clothing shops, restuarants, bars, salons, pizza, and delis (just to name a few) are a dime a dozen and if an investor wanted to own a piece of a business like that, they'd just buy one on their own.

              In my opinion, the overhwhelming majority of entreprenuers would better spend their time by working hard to get a bank loan (by improving their personal credit, saving cash to put down, and gaining direct experience) than seeking an angel investor.
                • Re: Angel Investors, Post HERE!
                  Iwrite Pioneer
                  NoBullFunding,

                  Okay, that I can get behind. I agree that they should be doing those things even if they can find funding.

                  Now, sometimes it is how you present your idea. I live in the DFW area (actually between the two cities in Grand Prairie). Down the street is Six Flags, a water park, the Rangers stadium and now the new Cowboys stadium - I'm talking less than 5 miles. Grand Prairie and Arlington are next to each other and have a good size population of about 530,000 between the two cities. After Houston, Dallas, Fort Worth and San Antonio this is the largest population of African Americans in the state but there is no soul food restaurant. Now, it makes sense if you are looking to open a soul food restaurant say in the empty Steak and Ale directly across from Six Flags to find an investor but your food needs to be good and your plan solid. I don't see a smart investor shooting that down. As of right now, folks are driving 20 to 40 miles round trip for soul food, spending an average of $22.00 a guest check. A person doesn't go in and ask for money, they put on a presentation that highlights how popular some of the other soul food restaurants further away are, they present a tasting, they preach opportunity.

                  Because of the nature of the area, I believe a bed and breakfast, a real dessert style restaurant, a New York deli and maybe even a really nice arcade would be great for this area, but they have to be run right. I agree with you, but I think it is the presentation and planning, not the actual idea that kills most small businesses when it comes to securing funding.
                • Re: Angel Investors, Post HERE!
                  tojo09 Newbie

                  can you link me up with investors? I'm in the export/import trade
                • Re: Angel Investors, Post HERE!
                  Iwrite Pioneer
                  I posted a response but I am being monitored. Look for it to show up in a few hours.
                  • Re: Angel Investors, Post HERE!
                    DomainDiva Ranger
                    My company got going with 195,000 from a small businessman who is also a friend. However it should also be noted that all my team members have worked for shares and little money as the 'scope creep' creeped and totally took over. I feed the baby each month as well, and will in January cash in the last of my ROTH to get us to market.

                    I am forutnate to have a technical and design team that looked at the product and decided at the beginning they were going all the way with it.

                    If I had outsourced the code and design to a company like EDS the total for development would have been in the millions. Instead, we all hunkered down to 'get 'er done'!

                    Personally I think that any angel investor that posts any infromation here will be overrun and overwhelmed with the sheer number of requests. Perhaps you would, Mr NoBull start some kind of a 'vetting process' for angel investors? That way you could categorize by investor, money to invest, what the angel wants to invest in etc and then vet by category...and take a small percentage (less than 5) for being the 'agent'.

                    There are people out there with money to invest. The problem is that there is no real vetting process for the small angel. So have you started yet? (wink)
                    • Re: Angel Investors, Post HERE!
                      DomainDiva Ranger
                      I have been denied. (I think) Lets see if this posts...
                      • Re: Angel Investors, Post HERE!
                        golfheaven Adventurer
                        I have posted two previous times about the problems i believe that are prevelant and will share them again here for i see some relevance.

                         

                        Because 600,000 companies a year are founded in the United States alone and many of them seek outside funding, there are many, many web sites that take aim at this lucrative market and purport to introduce entrepreneurs to investors. The sad fact, however, is that while it's very easy for a site to sign up thousands of entrepreneurs (who want the money), it's virtually impossible for them to sign up investors (who have the money.) That's why none of these sites can legitimately point to their track record for getting entrepreneurs funded (despite any claims to the contrary). Instead, they make their money in one of three ways: selling you as a lead to service providers, selling advertising against your page views as you chat with other entrepreneurs, or charging you listing fees and then up-selling and re-selling you when you don't get funded, and then the upfront due diligence fee's which should be escrowed for both parties protection especially if contact was web oriented.

                         

                        Then there is the scams which is for another day.

                         

                         

                        CAPITAL INVESTMENTS

                         

                         

                        The problem: The Atlanta area, and much of the Southeast in general, suffer from lack of capital investment into start-up stage companies, despite booming population and economic growth, the long-established presence of some of the world's most important companies, and being home to outstanding centers of academic excellence. Because of certain systemic defects in the Atlanta early start-up market, many entrepreneurs have become discouraged about the opportunity to start their businesses in Georgia. This problem plagues much of the southeastern United States.

                         

                        The causes: Atlanta, relative to markets like Boston and San Francisco, is a relatively young capital market. Consequently, there is not the broad, established base of investors that exists in these other markets. Further, entrepreneurs are generally not as sophisticated in their approach to raising capital in the Southeast as they are in more developed capital markets. Symptoms of the dysfunctional market in Atlanta include the following:

                        • Most entrepreneurs in the region are untrained in how to identify and approach investors, how to credibly present their opportunities to investors, and how to make their companies attractive from an investment perspective.
                        • Much of the investment community in Atlanta is disengaged from entrepreneurs. They do not make themselves available to coach and teach entrepreneurs how to make their opportunities more financially attractive.
                        • Most "professional networking" meetings are attended neither by investors nor by executives of emerging high-growth companies. The mass of service providers and salesmen have scared them off.
                        • The few consultants who are competent to advise companies are prohibitively expensive.
                        • Most "professional networking" meetings are located in the parts of Atlanta to which are the least convenient for most investors to travel.
                        • Almost none of the investment community in Atlanta is willing to tolerate the risk associated with what used to be called true capital opportunities.
                        • Unscrupulous members of the business community attempt to monetize their rolodexes by promising introductions to potential "investors" in exchange for buying their professional services or for paying thousands of dollars to deliver presentations ("pay-to-pitch") to rooms of strangers. Others act as amateur brokers, seeking finder's fees for early-stage investments that result from their introductions. All of these forces create friction in the start-up market that prevents capital from locating investment opportunities.
                        • Successful entrepreneurs who achieve a successful high-value exit for their companies frequently withdraw from the entrepreneurial community, often because they realize that they lack the skill and experience to invest in other, Start-up companies to give someone else the chance that someone years ago gave them.
                        • The myths: Many entrepreneurs believe that there is no early capital available in Atlanta, and investors think there is a scarcity of quality investment opportunities. Neither is true, but the environment is dysfunctional and there are systematic characteristics of the environment that actively prevent capital and quality opportunities from finding one another.

                         

                        The solution: Entrepreneurial community and investors (current and potential), with

                         

                        Opportunities and capital to find each other in local markets.
                          • Re: Angel Investors, Post HERE!
                            DomainDiva Ranger

                            Whoa Golf Heaven! You just described the Dallas-Fort Worth VC/entrepreneur market as well. Part of the problem is that there is no concentration of technical talent in these areas. My tech team is in California, I am fortunate to have advertising/marketing and design in the Fort Worth area.

                            Additionally many entreprenuers do not have the intestinal fortitude to deal with the VC/investor mentality. When I was making the rounds I was treated extremely badly, it's like the more abuse you can take, the better your chances of being funded are. Many people throw in the towel after one or two VC experiences. Dysfunctional is a perfect word for the process from both sides of the fence.

                            I suppopse what bothered me so much was not interest in the technology and the uniqueness of how we have solved a problem, but what a trumped up spreadsheet would say. I felt like I was being deceitful if I gave numbers that I had no way of proving. It was as if my honesty in presenting the technology was questioned because I could not lie abouot the potential revenue.

                            What are your thoughts? You really seem to have a handle on this.
                          • Re: Angel Investors, Post HERE!
                            Lighthouse24 Ranger

                            Loans, lines of credit, and other financial services arrangements can be arranged on-line, but beyond what's already provided by financial matchmaking sites like VirginMoney and Prosper, I don't think business owners and prospective investors are likely to meet via the Internet.

                            The vast majority of people who make posts seeking funding on-line are really not ready for what they are seeking -- they are individuals with little or no experience, only a vague wish or general business idea, and the expectation that a total stranger will provide all the money for them explore it.

                            A real business owner has already done a lot of hard work, invested his/her own money, and developed the same kind of love and vision for his/her enterprise that a parent has for a child. The real owner isn't about to turn that baby's future well-being over to a stranger on-line. If I'm seeking funding, I want to KNOW the person I'm counting on to provide it. Likewise, the investor would want to know ME. We need to look each in the eye, size each other up, and have some mutual acquaintances who can vouch for the ways we behave and perform (in good times, and when the pressure is on).

                            The idea of an on-line "clearinghouse" or list of prospective investors seems to presume that the investor will be sold on a business plan first, and then consider the possibility of funding the person who wrote it. I think it's more realistic that the investor will be sold on the person first, and then consider the possibility of looking at his/her business plan. I think most legitimate investors operate in the real world, not the virtual one.