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November 14, 2018, 01:15:15 PM |
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Here, chairman of the World Business Angel Investment Forum, Baybars Altuntas, provides Business Advice readers with guidance on securing interest from an angel investor in a startup. Angel investment has enjoyed increased exposure in recent years, and when world leaders identified it as one of the crucial lifelines that would help bring stability and prosperity to the world’s economies, business owners and economists everywhere have taken notice. Today, there is a wave of new entrepreneurs ready to get their businesses off the ground, but many are not sure how to go about seeking investment and gaining interest from an angel investor. PEOPLE, NOT PROJECTSAlthough the business idea you present to an investor does have to be adequate, angel investors focus far more on the person who comes to them rather than the project they pitch, so give plenty of thought to the way you present yourself. This includes your physical appearance, your demeanour and the words you use in your pitch. If you come across as an engaging and inspiring person, you are more likely to attract interest from an angel investor.
ELEVATOR PITCHAngels have seen it all in business, and if you’re going to grab their attention, you are going to need to make your pitch succinct and captivating. So, forget the long, rambling presentation and work on perfecting your elevator pitch. A good entrepreneur should be able to grab interest from an angel investor by explaining their key points around financing, the payback period and exit strategy. This should take just five minutes – any longer and you are likely to lose an investor’s interest and come off as someone who’s not going to be an engaging person to work with.
EXIT STRATEGYAddressing a mutually-beneficial exit strategy during your pitch is a must, and it is common for entrepreneurs to get so caught up in starting a business relationship that they neglect to think of how they will ultimately finish it. Angel investors want to know exactly what they stand to gain from a business arrangement and how much of their time it will require, so a firm exit strategy is vital for getting interest from an angel investor. KNOW YOUR ANGELThey may be experienced and wealthy, but this doesn’t mean that an angel investor’s money is just there for the taking. If an angel invests in you, they want to know it is because you are a good match, and not just because you needed the funds they could provide. So, research your prospective angel investors. Get to know their backgrounds, previous business arrangements and passions, if for no other reason than because they will give you a good indication of how good a match they would be for you. SECTORSAn angel investor is unlikely to invest in a health product if their expertise is in communications, and they are unlikely to have the contacts and resources that would be most relevant to your proposal. When looking at prospective investors, pay particular attention to the sorts of investments they make, and consider how well your pitch fits into this demographic.
DUE DILIGENCEIn the event that an angel decides to invest in your company, it is standard for a period of due diligence, or “probation” to occur, so expect it and understand the need for it. A pitch is one thing – its whole point is to be appealing – but if the reality of your business credentials or numbers is not in line with the information you present in your pitch, then the investor has every right and reason to reconsider their offer of investment. Don’t take the due diligence period as discouraging – it is a wise move on an investor’s part. Coming out of this period successfully will only be further validation of your business’s potential. by Baybars Altuntas
Source: businessadvice.co.uk |
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November 14, 2018, 01:27:11 PM |
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Dave Gowel has raised $3 million in the three years since he started RockTech, a Cambridge, Mass.-based enterprise-training platform for cloud technologies. Of the 29 angel investors he’s brought onboard, all have one thing in common: “Every investor relationship I have was influenced by LinkedIn,” says Gowel, RockTech’s CEO. “A compelling example of this came when one of my investors listed his affiliation with RockTech on LinkedIn, and then another angel who saw that update contacted me,” Gowel continues. “The latter angel had a very strong respect for my investor who had updated his profile, and [he] became an investor within six months—he even brought in another angel to invest with him.” Thanks to the U.S. Securities and Exchange Commission lifting the ban on general solicitation for investors, LinkedIn has become a potential mother lode for identifying and pitching investors. But it’s a nuanced and regulated game. “I don’t think a general solicitation as a first contact is the way to go,” Gowel says. Instead, he and others recommend using LinkedIn as a recon tool to improve real-world interactions with potential investors. Here’s how. • Embrace the advanced search. If you’re not clicking the “Advanced” link next to the site’s search bar and hunting by industry, company, location, alma mater, groups you belong to or specific keywords of your choosing, you’re wasting your time, says Gowel, who, in addition to running RockTech, is the author of The Power in a Link: Open Doors, Close Deals, and Change the Way You Do Business Using LinkedIn. “There are 300-million-plus people on LinkedIn,” he says. “Advanced searches help you cut through the clutter and zero in on the right people to meet.” Next, follow a potential investor’s company page. Join any relevant LinkedIn groups to which your target belongs. Scour his or her profile and posts to familiarize yourself with the person’s portfolio, investment approach, likes and dislikes, says Milwaukee entrepreneur Seth Knapp, who’s sussing out investors for his social marketing app, Chitter. “Reaching out to an investor without doing any homework tells him everything he needs to know about you—none of it good,” he explains. • Vet and be vetted. Resist the urge to ping investors who sound like a fit right away. Instead, ask mutual contacts for insights about them, Gowel advises. You don’t want to partner with an investor who’s known for being difficult or one who doesn’t meet the SEC’s definition of an accredited investor (see sidebar). If you do decide to move forward, don’t contact an investor cold; an introduction through a mutual contact can catapult you to the top of the correspondence slush pile. “The one thing you can’t fabricate is a strong relationship,” Gowel says. Plus, he adds, a mutual acquaintance may know how and when that investor prefers to be contacted. • Be patient. Partnerships aren’t built overnight. “Your deck and any other information you send over will fall on far less deaf ears if you patiently develop a relationship with the investor,” Knapp says. Of course, most angels won’t end up investing, no matter how much they love your pitch, warns Brandon Bruce of Cirrus Insight, which sells a software add-on to Salesforce. But a carefully cultivated relationship can lead to market intel, strategic advice and, most important, referrals to other potential investors. THE FINE PRINTDespite the SEC’s loosened regulations for soliciting investors, there are still rules. Before you start hitting up your LinkedIn network to publicize your capital raise, consult an attorney to make sure your pitch is legal and your paperwork has been filed with the SEC. You’ll also need to familiarize yourself with the SEC definition of “accredited investor”: someone with $200,000 or more in annual income or $300,000 in annual household income or exceeds $1 million in net worth, excluding primary residence. Keep in mind that it is your responsibility to make sure the investors are accredited. If they’re not associated with an angel funding group or known to be accredited, you may have to ask them to provide copies of their tax returns to prove it. |
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November 14, 2018, 07:10:53 PM |
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Sports sponsorship is a $66-billion industry with massive flaws. That is why we introduce Instant Sponsor, a blockchain-powered global sponsorship marketplace seamlessly connecting brands and the rights holders (teams, athletes and events) across sports, Esports, and entertainment. The key to our platform is connecting brands with rights holders/sponsorship opportunities through matching algorithms targeting demographics, maximizing exposure and providing quantifiable metrics for every dollar spent. We also pride ourselves on efficiency thought real-time procurement of sponsorships. Please see clickable prototype: https://projects.invisionapp.com/share/SW5MNSEX6#/screens/150552966https://www.investorlegends.com/forum/topic/instant-sponsor-enhancing-a-66-billion-industry |
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November 14, 2018, 08:54:41 PM |
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Website: https://icotravelvee.com/Industry: Tourism, Booking Stage (idea, ready business, pre-startup, etc): ICO Initial Coin Offering We're giving 50% bonus on TRAVEL for Pre Sale a maximum of $ 1,000,000 Needed amount: $5,000,000 (soft cap) and 30,000,000 (hard cap) https://www.investorlegends.com/forum/topic/ico-travelvee-innovative-booking-platform |
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November 15, 2018, 12:07:00 PM |
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Why Angels Are Moving Online Recently, some accredited angel investors have begun moving their investment activity from angel groups, like the Northcoast Angel Fund, to online platforms, like SeedInvest. This decision got me thinking: Will online angel platforms ultimately replace angel groups? While I don’t think the online sites will drive angel groups out of business the way that digital cameras replaced chemical-film ones, the web platforms will take a sizable number of angels away from groups. Angel groups are better for the very entrepreneurially experienced, active investors who are writing big checks. But the platforms are a superior choice for less entrepreneurially experienced, less-active investors who are deploying smaller amounts of money. Here are three reasons why: SUCCESSFUL INVESTING THROUGH AN ANGEL GROUP TAKES A LOT OF TIME.Investment success depends on active involvement in screening deals, conducting due diligence, and monitoring investments. Few people have that kind of time. Even experienced and successful angel investors are reallocating chunks of their angel investment portfolios to curated angel platforms because they simply don’t have enough hours to do all the screening and due diligence it takes to make money investing actively through angel groups. FEW ANGEL GROUPS HAVE ENOUGH SUCCESSFUL ANGELS TO FOLLOW.A few people make outsized returns at angel investing, while most don’t make any money. This distribution of returns creates a dilemma for people who can’t, or won’t, rely on their own judgment. If you are going to depend on someone else to screen deals, conduct due diligence, and monitor investments for you, as some angel group members do, then you need to follow someone who knows what they are doing. For members of Tech Coast Angels, Band of Angels, or other longstanding angel group with lots of past exits, that’s not a problem. But at many of the angel groups that have been formed in the past decade, less active members are following group managers or active investors who don’t have a successful track record. Those less active investors are probably better off looking on SeedInvest for the companies that Brad Feld, Jason Calacanis,, or David S. Rose are backing, than following someone local who hasn’t got the track record of identifying companies that have exited successfully in the past. ONCE-IN-A-LIFETIME DEALS AREN’T AVAILABLE TO MEMBERS OF MOST ANGEL GROUPS.Angel groups don’t see many of the really great start-up investment opportunities because those new companies are disproportionately found in places like San Francisco, Boston, and New York. Take unicorns as an example. There aren’t any in Cleveland or Pittsburgh. That means that for angels in most parts of the country the probability of making a seed stage investment in the next unicorn is higher on an angel platform than through a local angel group. For active angels with a lot of time and entrepreneurial experience, sticking with the angel-group model makes a lot of sense. Group investors are making more informed decisions about opportunities than platform investors because they are meeting the founders face-to-face, conducting due diligence directly, and negotiating their own terms. But for less experienced and more passive angels who are writing checks too small to get themselves a board seat, migrating to the platforms makes sense. With a platform, the investor can make better use of his or her time, get access to better deal flow, and can more easily follow expert angels. Angel platforms will not replace angel groups anytime soon. But many inexperienced angels, and angels with little time and limited capital, will move from groups to online platforms. Because those angels make up a large portion of the people who joined angel groups over the past decade, online platforms will change the accredited angel investment model. https://www.investorlegends.com/blog/why-angels-are-moving-online |
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November 15, 2018, 01:44:07 PM |
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How do you find venture funding? I have to start with a major negative: if you have to ask if your startup can get venture capital, then it almost certainly can’t. Venture capital is a very rarified atmosphere of high-end startups and emerging businesses with experienced management teams, high potential growth, secret sauce, and so on. People without track records don’t get venture capital. Business that don’t look like they can grow extremely fast and to an extremely large size don’t get venture capital. Service businesses don’t get venture capital. So before you read these tips, first understand the difference between venture capital and angel investment and then you can add in 5 essentials for angel investment. And keep in mind, as you read the second article, that venture capital demands everything that angel investors do—and more. And, most venture capital wants to invest larger amounts in later-stage startups. Are you still with me? Good. Here are my 10 tips (oh, and by the way, I did raise venture capital for Palo Alto Software at one point, and I’ve been a consultant to venture capital for 35 years). 1. Don’t say venture capital when you mean angel investment, or friends and family. Many people do that. Venture capital is a subset of outside investment, and the hardest to get. If you have to ask whether your startup is a venture capital candidate, then it probably isn’t. 2. Don’t do anything in bulk. Avoid email templates like the plague. Don’t think for a minute that any serious investor would ever read a summary memo, or watch a pitch, much less read a business plan, when it looks like it’s being sent in bulk to multiple investors. That idea dates back to the 1980s when people imagined that VCs were looking at business plans coming in unsolicited. Actually, they weren’t, but sometimes they pretended they were. Not anymore. 3. Do your research first. Identify a select few VC firms that invest the amount you need, in your industry, at your stage of development, in your region. Venture capital firms each have their unique interests, identities, and personalities. They have preferences about where they invest, at what stage, and what amounts. Most of them have websites, and most of the websites announce their preferences. They don’t want to deal with people who aren’t in their category and don’t know it. They expect you to know. The National Venture Capital Association website is a wealth of information. It has general information about venture capital, advice, statistics, book lists, and even a listing of regional venture capital associations. You can also search the web for local leads (search “venture capital [your location]” ) and industry-specific leads (search “venture capital [your business type]” ). 4. Forget the businesses that prey on hopeful entrepreneurs by selling databases and leads and such. Those contacts are already rubbed raw by unsolicited emails and phone calls. It doesn’t work that way; it has to be one at a time. Furthermore, on a related subject, those businesses that take your money with the pretense that VCs will browse your summary and find you are cheating you. The deals chase the money; the money doesn’t chase the deals. 5. Approach a select few target VC firms only one at a time, carefully. Be patient. Look first for introductions by checking out people you know who might know them, alumni relationships, business associations, their public speaking dates, any contacts in the companies in which they’ve already invested. Don’t be afraid to submit using their website form or call their switchboards, but keep that as a last resort. Your chances are way better if you fit their normal profile and you’ve been able to meet one of the partners, or get an introduction from somebody they know. 6. Have an extremely good tag line and instant summary. Start with the elevator pitch and get the key points down, but the theoretical 60 seconds of the classic elevator pitch is too much. You need to be able to describe your business in a sentence or two and that sentence has to be intriguing. People have had success with “the [some well-known business] of [some new business area].” For example, Alibaba was called “The Amazon.com of China.” I ran into a company calling itself “the Netflix of kids’ toys,” and with that, the idea was instantly clear. 7. Have an extremely good quick video or a one-page summary, and send that as the follow-on email when you talk with a VC or get an introduction. Expect the real information exchange to happen in email. The expected follow up to that quick three sentences is a summary, in email. These days a great video works better than an email summary. Keep it secure, not public, and a simple password system like Vimeo or one of its competitors is best. The YouTube email-based permissions are risky because everybody has too many email addresses these days, and confusion is risky. Make it seamless. And I like the liveplan pitch too, but I also have to disclose, as I write that, that I’m biased. I have an interest in LivePlan. 8. If your summary video—or summary memo—works, then the next step is a pitch. In practice, what happens is there is a contact, you send the follow-up video or summary, and then you wait, anxiously, to be invited to pitch. The pitch is a slide deck, yes, but that’s not what matters; it’s the VCs chance to meet you, check you out, see your team, and hear your story. There’s a lot about the pitches on this website. Check this out. Still, don’t think success or failure depends on the pitch. It doesn’t. It depends on the story, the credibility, and the VCs assessment of your future prospects. 9. Have a business plan ready before you finish the summary or the pitch. The business plan is the screenplay, the pitch is the movie. Don’t do the plan too big or too formal because it’s not going to last and should never be older than two to four weeks. Don’t swallow the myth about investors not reading your plan. The truth at the core of that myth is that investors will reject your business without reading your plan. But they won’t invest in it without reading the plan. No business gets money without going through rigorous study and examination first (they call that “due diligence”) and the plan is the active document for the due diligence. Although, for the record, there are some exceptions. When a well-known successful entrepreneur, the people we read about in the headlines, takes a new business to VCs those people will often get the investment without the same due diligence. VCs do compete for those deals. And unfortunately, those people, the stars, will then tell the rest of us that investors don’t read plans. 10. Expect the process to take way longer than you think it will. Due diligence alone will be several months of unending request for more documentation. When VCs say yes they really mean maybe, and when they say maybe they really mean no. 11. (Bonus tip) Never EVER spend investment money before the check clears the bank. Deals fall through all the time. 12. (The most important tip in the entire list, even though I put it last) Choose an investor like you’d choose a spouse. So that’s my advice. by Tim Berry
Source: articles.bplans.com https://www.investorlegends.com/blog/10-tips-for-finding-venture-funding |
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November 15, 2018, 07:37:07 PM |
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Company name: iLINK Location: Singapore Industry: Blockchain, Cryptocurrency, E-Commerce, E-Commerce Platforms, FinTech, Mobile Apps, Mobile Payments, Private Social Networking, Social Network Stage: Pre-Public Sale of Community Based Creation(CBC) Token 2 Billion Total Supply, 1 billion in Ethereum blockchain and 1 billion in NEO blockchain. Target Hardcap 50,000,000 USD Distributed in the TGE: 59% Website: https://cbc.ilink.networkhttps://www.investorlegends.com/forum/topic/ilink-cbc-geosocial-hyperlocal-social-commerce-ecosystem |
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November 16, 2018, 02:12:05 PM |
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Startup myth: The one about founders having to work for free to impress angel investors. This supposedly shows passion. Don’t believe it. Investors want people committed to working their startups, and that usually takes getting them paid. I’ve been getting a lot of upvotes on my answer to this question in Quora: How do entrepreneurs live without a salary to sustain their families and pay bills? MY ANSWERThat startup founders are supposed to work for free, and that investors want them to work for free, even as there is capital to work with. That’s just a myth. IMO. As an entrepreneur, I built a business and supported my family at the same time by continuing to consult in the same field I was developing software for. That’s not unusual. I did not have the luxury of not making an income. When I started Palo Alto Software, we already had four kids and a mortgage. Not making money was not an option. So that was a lot of work. It was hard. But it’s what really happens most of the time … entrepreneurs do a lot of work on the side, in between, to build their business without the luxury of working full time for free. As an angel investor, I expect founders to work without formal compensation only during the very earliest phases, because they have to. I expect that to be temporary. And when I invest in them, I want there to be enough money to pay them. I don’t believe startup founders working for free is a sustainable idea as they grow a business. People have lives. They need money. I don’t like it when founders promise to work for free over any extended period. It doesn’t work. They burn out. They need jobs and income so they quit. by Tim Berry
Source: timberry.bplans.com https://www.investorlegends.com/blog/pervasive-startup-myth-dont-work-for-free |
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November 16, 2018, 02:26:19 PM |
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My favorite five secrets of a great business team? This list came to me first as an answer to the question how do you build a great business team on Quora. These five points aren’t something from the business school curriculum. They come from the experience of actually doing it, recruiting a team and growing a business from zero to millions. MY LIST1. No skill or experience justifies lack of integrity. You need to trust the people you work with, and particularly, the people who become key team members to build on. 2. Diversity makes better businesses. Not for fake political reasons, but for real business reasons. Teams of different kinds of people – gender, background, ethnicity, and so forth – have broader vision than teams of people who are all the same. Diversity has been given a bad name by bigots. It’s not just morally correct, it’s also better business.
WHAT DIVERSITY DOES AND DOESN’T MEAN.3. Different skills and experience. You don’t want all developers or all marketers, you want developers, marketers, administrators, producers, leaders, and so forth. I see student groups that are three and four people who share the same major; that rarely works. 4. Shared values create strong bonds. Palo Alto Software was built by a team that shared my founder values about good business planning, startups, and small business. Jurlique was built by a team that shared founder values about cosmetics with only natural organic ingredients not tested on animals. And don’t confuse shared values with diverse types of people, skills and backgrounds. They are compatible, not contradictory, ideas. AVOID THE ALL-C-LEVEL-OFFICERS TEAM5. Beware of title inflation. Having the first four people all have C-level titles is usually a sign of youth and lack of experience. In the real world, founders are rarely all fit to be C-level officers for the long term. I recommend vague non-committal titles in the beginning, like “head of tech,” “marketing lead,” and so forth. Leave room to recruit stars later on, as needed, with the big titles. by Tim Berry
Source: timberry.bplans.com https://www.investorlegends.com/blog/5-secrets-of-creating-a-great-business-team |
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November 16, 2018, 03:49:10 PM |
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Beverage.Cash project – wine and craft alcohol trading platform with integrated social ecosystem and counterfeit protection. Presently there are two main problems in beverage industry: Counterfeit and product information According to the industry’s experts, fake wines now account for 20% of global wine sales and the same applies to other alcoholic beverages. As the demand for wine is rising in emerging markets, wine businesses and consumers have become major victims of wine fraud crimes. Another problem mentioned above is the product information. The labels used by manufacturers nowadays do not satisfy most of the consumers in terms of the information provided. Bearing in mind the widespread concern about health and thus the ingredients used in wine and other alcohol beverages production, the consumers want to make an informed decision when buying the products We propose to solve both problems with one solution by using of RFID/QR/NFC tags and blockchain technologies. WEBSITE: https://beverage.cash/https://www.investorlegends.com/forum/topic/beverage-cash |
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November 17, 2018, 09:02:27 AM |
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I was glad to be asked about common mistakes with financial projections. I read about 100 business plans a year for angel investment and business plan competitions. Most show unrealistic profitability. More people doing business plans should realize that most startups are unprofitable at the beginning; and that high growth correlates with losses, not profits. High projected profits indicate lack of understanding, not reasonable expectations of profitability. Profitability mistakes1. The most common mistake is with profitability. Most of the business plans I see project profits too high, or profits too early. In the real world, startups choose growth or profits, not both. The plans I see are aiming at angel investment. And for that, the investors win on growth, not profitability. Think about it: If a startup is profitable early on, it doesn’t need investors. 2. The second most common mistake is underestimated marketing expenses. Many successful tech businesses, especially software and web businesses, spend 30% or more of sales on marketing. 3. Don’t underestimate development expenses, testing, certifications, and expenses of regulations. 4. If you are selling physical products, don’t underestimate the impact of selling through channels, as distributors and retailers take their margins and often demand admin and co-promotion expenses. And distributors often pay very slowly, like six months or so after receiving the goods. 5. Never project sales by applying a small percentage to a large market. That doesn’t work. Nobody gets half a percent of a $10 billion market. Instead, sales forecasts should be built on drivers as assumptions. Drivers might be web visits and conversions, emails sent, paid search terms, or, for physical products, channel assumptions such as distributors, chains, stores, and sales per store. 6. Don’t project big growth in sales with only small increases in headcount. If you are going to sell $100 million in the fifth year, get a clue: you won’t do that with only $2 million in employee expenses. Divide your projected sales by your headcount, and compare that to industry benchmarks. For most industries, $250,000 per employee is really good. If you are getting $2 million per employee, that doesn’t mean you’re going to be that efficient. It means you don’t understand the business. Cash flow mistakes7. Having a profit doesn’t mean you’ll have cash in the bank. Good startup financial projections need to include cash flow. Always. For more on that, see points 4, 6. 8. Another very common mistake affects cash flow. Businesses selling to businesses (B2B) normally sell on account. A sale generates not money directly, but money owed, to be paid later, which goes on the balance sheet as Accounts Receivable, or AR. Every dollar in AR is a dollar that shows up as sales in the P&L but not in cash. 9. Many plans underestimate the length of the sales cycle and expenses related to selling directly to enterprises. 10. Many plans underestimate the cash flow affect of inventory. Every dollar in inventory is a dollar that hasn’t yet shown up in the P&L but may have already affected cash balances. by Tim Berry
Source: timberry.bplans.com https://www.investorlegends.com/blog/10-common-mistakes-with-startup-financial-projections |
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