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    2 Replies Latest reply on Feb 13, 2008 7:20 AM by frances

    making first time investment

    frances Wayfarer
      what good steps are needed going into investment for the first time?do i have to approach an entrepreneur to know what steps to take in entering investment deals?when is it ripe for me to start investment and with what amount of funds are reasonable?
      francelaluv@yahoo.com
        • Re: making first time investment
          Lighthouse24 Ranger

          Frances, if I'm reading your post correctly, you have money to invest and want to know how you can connect with entrepreneurs -- essentially, you're asking how you can become an angel investor or private lender. There are three general ways:

          1. Go it alone. Advertise the fact that you have money to invest or lend, and you'll have no shortage of responses! In fact, more than 300 business owners in this community have sought loans or investors over the past few months. The trouble is, only four of those were prepared to send the kind of formal business plan a potential lender or investor needs to see, and none of those four presented a strong profit potential (in my opinion). When you go it alone, you really have to know what to look for, and you have to spend quite a lot of time looking for it. There's a lot of risk (but of course, the potential for a huge reward).

          2. Join an angel investors group. These groups generally pool the money of multiple investors so they can enter into higher risk, higher reward ventures than any one individual could afford to do on his/her own. You can find many such groups on line, and most tend to focus on specific types of business investments where they a special interest or unique expertise. This is less risky than going it alone because you have other people evaluating the business plans and investment proposals along with you. Of course, your share of the reward is proportionally smaller.

          3. Join a "social lending club" (Virgin Money, Prosper.com, and Zopa are three examples.) It's kind of like ebay for borrowers and lenders. You simply go on line and click on the box that says you have money to lend, enter some info and outline your terms, and the site helps match you with borrowers. It not quite as exciting or profitable as true angel investing, but then it doesn't take as much knowledge or involve as much risk, either.

          Hope this helps. Best wishes.