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	<title>The Funding Guru &#187; Raising Money</title>
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	<link>http://www.thefundingguru.com</link>
	<description>Helping Entrepreneurs Prepare for Fund Raising</description>
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	<itunes:summary>The Funding Guru - help for entrepreneurs and startups with Angel and Venture Capital investors. Some real world great tips and insights from the funding guru and other entrepreneurs to help you with your business.</itunes:summary>
	<itunes:author>Andrew Ive - The Funding Guru</itunes:author>
	<itunes:explicit>clean</itunes:explicit>
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		<itunes:name>Andrew Ive - The Funding Guru</itunes:name>
		<itunes:email>andrew@TheFundingGuru.com</itunes:email>
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	<managingEditor>andrew@TheFundingGuru.com (Andrew Ive - The Funding Guru)</managingEditor>
	<copyright>Advisor Garage LLC 2009-2011</copyright>
	<itunes:subtitle>The Funding Guru</itunes:subtitle>
	<itunes:keywords>Startup, funding, capital, venture, angels, investors, entrepreneur, guru, CEO, help,</itunes:keywords>
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		<title>The Funding Guru &#187; Raising Money</title>
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		<item>
		<title>Are you this kind of person?</title>
		<link>http://www.thefundingguru.com/are-you-this-kind-of-person-2.html/</link>
		<comments>http://www.thefundingguru.com/are-you-this-kind-of-person-2.html/#comments</comments>
		<pubDate>Mon, 01 Mar 2010 15:53:33 +0000</pubDate>
		<dc:creator>Andrew</dc:creator>
				<category><![CDATA[How To]]></category>
		<category><![CDATA[Offering Help]]></category>
		<category><![CDATA[Raising Money]]></category>
		<category><![CDATA[angel investor]]></category>
		<category><![CDATA[Business]]></category>
		<category><![CDATA[Financial services]]></category>
		<category><![CDATA[Fundraising]]></category>
		<category><![CDATA[Investment]]></category>
		<category><![CDATA[Money]]></category>
		<category><![CDATA[Small business]]></category>
		<category><![CDATA[venture capital]]></category>

		<guid isPermaLink="false">http://www.thefundingguru.com/?p=791</guid>
		<description><![CDATA[So much so that I spent months looking through different sites, subscribing to different email lists and following certain bloggers. I thought I could get everything I needed from multiple sources and save myself some cash. After all, you can get nearly everything you need for free online right?
Related posts:<ol>
<li><a href='http://www.thefundingguru.com/the-venture-capital-checklist.html/' rel='bookmark' title='The Venture Capital Checklist'>The Venture Capital Checklist</a></li>
<li><a href='http://www.thefundingguru.com/how-do-i-write-an-executive-summary.html/' rel='bookmark' title='How do I write an Executive Summary?'>How do I write an Executive Summary?</a></li>
<li><a href='http://www.thefundingguru.com/are-angel-investors-cheap-money.html/' rel='bookmark' title='Are Angel Investors Cheap Money?'>Are Angel Investors Cheap Money?</a></li>
</ol>]]></description>
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<dl class="wp-caption alignright" style="width: 310px;">
<dt class="wp-caption-dt"><a href="http://commons.wikipedia.org/wiki/Image:Chocolate_brownies_without_table.jpg"><img title="Chocolate (Bangor) Brownies" src="http://www.thefundingguru.com/wp-content/uploads/2010/03/300px-Chocolate_brownies_without_table.jpg" alt="Chocolate (Bangor) Brownies" width="300" height="225" /></a></dt>
<dd class="wp-caption-dd zemanta-img-attribution" style="font-size: 0.8em;">Image via <a href="http://commons.wikipedia.org/wiki/Image:Chocolate_brownies_without_table.jpg">Wikipedia</a></dd>
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<p>You can get almost everything you need for free on the web&#8230;</p>
<p>So much so that I spent months looking through different sites, subscribing to different email lists and following certain bloggers. I thought I could get everything I needed from multiple sources and save myself some cash. After all, you can get nearly everything you need for free online right?</p>
<p>But then I realized something.  Yes, I probably could&#8230;if I was looking for a recipe for <a title="Chocolate brownie" href="http://en.wikipedia.org/wiki/Chocolate_brownie">chocolate brownies</a> or the ten steps to teach my dog to sit and roll over, then you can probably find everything you need for free online. But I realized, after spending months pulling different strands of information together, that I was going to have to take a risk and trust that the person who was offering me a product that I&#8217;d have to pay for, was not a shark and the product would be worth more than I paid for it&#8230;</p>
<p>I had to, in short, suspend my disbelief that this person was going to screw me&#8230;tough when it was more than $100 and how much about this guy did I really know? I guess the reason I took the step and bought the product was because what I wanted to know was not as unimportant as a chocolate brownie recipe &#8211; I wanted the information and a) didn&#8217;t want to wait and spend the hours or days pulling the information together and b) I wanted to make sure the information was good information&#8230;I made the decision to trust that person and thankfully, I wasn&#8217;t disappointed&#8230;</p>
<p>So &#8211; I recently launched (in a very quiet manner&#8230;) two products / services&#8230;.the first was offering ten entrepreneurs one on one time to help them prepare for angel or venture capital funding&#8230;.I called that program &#8220;1 of 10&#8243; and details are <a href="http://www.TheFundingGuru.com/1of10.html" target="_blank">here</a>. </p>
<p>Most of the ten slots sold out quite quickly &#8211; so some people suspended their disbelief and were committed enough to their new businesses, that piecing together information from multiple sources and &#8216;winging it&#8217; wasn&#8217;t good enough. I guess that when something is as important as fulfilling your lifetime dream of starting a business, investing in improving your chances of success is a smart thing to do&#8230;</p>
<p>The other quiet launch was of an audio product which was designed to help people supercharge their fund raising from <a class="zem_slink freebase/guid/9202a8c04000641f800000000731f669" title="Angel investor" rel="wikipedia" href="http://en.wikipedia.org/wiki/Angel_investor">angel investors</a> in particular.  Details of that product are <a href="http://www.thefundingguru.com/Supercharger.html" target="_blank">here</a>. </p>
<p>This audio product is a pre-launch of a more comprehensive (but probably more expensive) product with video, pdfs and audio.</p>
<p>So after writing multiple posts to help people I finally dipped my toe in the water and create some products. The goal of those products is to bring together years of experience and help people who want to increase their chances of raising money to fund their new or young businesses.  Some readers have asked why? And even thought (or implied&#8230;) that it was somehow wrong of me to do so&#8230;the short answer is, there are plenty of free resources online but I&#8217;m a firm believer that you get what you pay for&#8230;if something is worthwhile, then there is usually a cost involved &#8211; like any business, the customer needs to decide if the item they wish to buy is worth the price tag attached.  I can honestly say that making a few hundred bucks for a product is not a real motivator &#8211; but, and here&#8217;s why there&#8217;s a price tag at all, knowing people appreciate the content enough to purchase them and based on that purchase will likely take the content and use it to start or supercharge their business IS a huge motivator.</p>
<p>Could I give it all away for free? Sure. Would people value the content as much&#8230;you know, somehow I doubt it and anyway, what is the price tag for saving yourself months and increasing your chances of getting the money you need to fulfill your dream?</p>
<p>Last question of the post &#8211; what help do you need? or What question do you have? If you could get help with anything related to your startup &#8211; what would that be? Anything goes related to bootstrapping, angel investors, Venture capitalist or even broader.</p>
<p>Add a comment or send me an email via the contact page. </p>
<p>Best</p>
<p>Andrew</p>
<h6 class="zemanta-related-title" style="font-size: 1em;">Related articles by Zemanta</h6>
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<p>Related posts:<ol>
<li><a href='http://www.thefundingguru.com/the-venture-capital-checklist.html/' rel='bookmark' title='The Venture Capital Checklist'>The Venture Capital Checklist</a></li>
<li><a href='http://www.thefundingguru.com/how-do-i-write-an-executive-summary.html/' rel='bookmark' title='How do I write an Executive Summary?'>How do I write an Executive Summary?</a></li>
<li><a href='http://www.thefundingguru.com/are-angel-investors-cheap-money.html/' rel='bookmark' title='Are Angel Investors Cheap Money?'>Are Angel Investors Cheap Money?</a></li>
</ol></p>]]></content:encoded>
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		<item>
		<title>What Are Angel Investors Looking For? Six Key Motivations of Angel Investors (#4)</title>
		<link>http://www.thefundingguru.com/what-are-angel-investors-looking-for-six-key-motivations-of-angel-investors-4.html/</link>
		<comments>http://www.thefundingguru.com/what-are-angel-investors-looking-for-six-key-motivations-of-angel-investors-4.html/#comments</comments>
		<pubDate>Wed, 17 Feb 2010 17:31:18 +0000</pubDate>
		<dc:creator>Andrew</dc:creator>
				<category><![CDATA[Angel Fund Raising]]></category>
		<category><![CDATA[How To]]></category>
		<category><![CDATA[Raising Money]]></category>
		<category><![CDATA[angel investor]]></category>
		<category><![CDATA[Business]]></category>
		<category><![CDATA[Financial services]]></category>
		<category><![CDATA[Harvard Business School]]></category>
		<category><![CDATA[Investment]]></category>
		<category><![CDATA[Silicon Valley]]></category>
		<category><![CDATA[venture capital]]></category>
		<category><![CDATA[Wall Street]]></category>

		<guid isPermaLink="false">http://www.thefundingguru.com/?p=739</guid>
		<description><![CDATA[By looking for a better answers than 'just to make money', they are moving themselves closer understanding the real levers they need to use when meeting and building a relationship with angel investors which are key to successfully raising Angel Investor money - and that, along with helping people with the Venture Capital fund raising too...is what this site is ALL about.
Related posts:<ol>
<li><a href='http://www.thefundingguru.com/what-are-angel-investors-looking-for-the-six-key-motivations-of-angel-investors-2.html/' rel='bookmark' title='What are Angel Investors Looking For? The Six Key Motivations of Angel Investors (#2)'>What are Angel Investors Looking For? The Six Key Motivations of Angel Investors (#2)</a></li>
<li><a href='http://www.thefundingguru.com/are-angel-investors-cheap-money.html/' rel='bookmark' title='Are Angel Investors Cheap Money?'>Are Angel Investors Cheap Money?</a></li>
<li><a href='http://www.thefundingguru.com/finding-angel-investors-all-about-social-networking-total-bs.html/' rel='bookmark' title='Finding Angel Investors is All About Social Media Now &#8211; What BS!'>Finding Angel Investors is All About Social Media Now &#8211; What BS!</a></li>
</ol>]]></description>
			<content:encoded><![CDATA[    Image via Wikipedia    The first article is here and the second here and the third here, just in case you missed them&#8230; If you have not had a chance to read them, let me give you a brief cliffs notes &#8211; this series of articles responds to the [...]<p>Related posts:<ol>
<li><a href='http://www.thefundingguru.com/what-are-angel-investors-looking-for-the-six-key-motivations-of-angel-investors-2.html/' rel='bookmark' title='What are Angel Investors Looking For? The Six Key Motivations of Angel Investors (#2)'>What are Angel Investors Looking For? The Six Key Motivations of Angel Investors (#2)</a></li>
<li><a href='http://www.thefundingguru.com/are-angel-investors-cheap-money.html/' rel='bookmark' title='Are Angel Investors Cheap Money?'>Are Angel Investors Cheap Money?</a></li>
<li><a href='http://www.thefundingguru.com/finding-angel-investors-all-about-social-networking-total-bs.html/' rel='bookmark' title='Finding Angel Investors is All About Social Media Now &#8211; What BS!'>Finding Angel Investors is All About Social Media Now &#8211; What BS!</a></li>
</ol></p>]]></content:encoded>
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		</item>
		<item>
		<title>Are Angel Investors Cheap Money?</title>
		<link>http://www.thefundingguru.com/are-angel-investors-cheap-money.html/</link>
		<comments>http://www.thefundingguru.com/are-angel-investors-cheap-money.html/#comments</comments>
		<pubDate>Tue, 16 Feb 2010 14:32:50 +0000</pubDate>
		<dc:creator>Andrew</dc:creator>
				<category><![CDATA[How To]]></category>
		<category><![CDATA[Raising Money]]></category>
		<category><![CDATA[angel investor]]></category>
		<category><![CDATA[Business]]></category>
		<category><![CDATA[Financial services]]></category>
		<category><![CDATA[Google]]></category>
		<category><![CDATA[Initial public offering]]></category>
		<category><![CDATA[Investment]]></category>
		<category><![CDATA[Rate of return]]></category>
		<category><![CDATA[venture capital]]></category>

		<guid isPermaLink="false">http://www.thefundingguru.com/?p=725</guid>
		<description><![CDATA[The first two companies I started began with Angel Investments -- for the first start-up, where I had designed an award winning fire escape ladder, the angel’s cash allowed me to quit being a minimum waged Consultant (minimum wage when you divided my hefty salary by the 100 + hour working weeks...) and gave me the chance to pursue my passion to start and build my first business.
Related posts:<ol>
<li><a href='http://www.thefundingguru.com/how-to-get-cheap-money-for-your-startup-part-2.html/' rel='bookmark' title='How to Get Cheap Money for Your Startup (Part 2)'>How to Get Cheap Money for Your Startup (Part 2)</a></li>
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</ol>]]></description>
			<content:encoded><![CDATA[<div id="attachment_726" class="wp-caption alignnone" style="width: 231px"><a href="http://www.thefundingguru.com/wp-content/uploads/2010/02/1.jpg"><img class="size-medium wp-image-726" title="Are angel investors cheap money?" src="http://www.thefundingguru.com/wp-content/uploads/2010/02/1-221x300.jpg" alt="Are angel investors cheap money?" width="221" height="300" /></a><p class="wp-caption-text">Are angel investors cheap money?</p></div>
<p>Have you been thinking about getting a few angels?</p>
<p> No&#8230;Not the kind with wings but the kind that dips into their big pockets and help entrepreneurs start and build their businesses.</p>
<p>The first two companies I started began with Angel Investments &#8211; for the first start-up, where I had designed an award winning fire escape ladder, the angel’s cash allowed me to quit being a minimum waged Consultant (minimum wage when you divided my hefty salary by the 100 + hour working weeks&#8230;) and gave me the chance to pursue my passion to start and build my first business.</p>
<p>If you google &#8216;<a class="zem_slink" title="Angel investor" rel="wikipedia" href="http://en.wikipedia.org/wiki/Angel_investor">Angel Investors</a>&#8216; , most of the results focus on what Angels are (broadly) and many of the articles keep it so general as to be close to useless if you are actually in the process or are about to start the search to find and close your first angel investor round&#8230;many articles include some good points but I found most of them too &#8216;money-centric&#8217;.</p>
<p>Huh? You are probably thinking&#8230;isn&#8217;t that what Angels are all about?</p>
<p>Well I&#8217;d like to offer you a different way of thinking about it. </p>
<p>It’s true that Angels tend to get involved in very early stage companies and often look for a high rate of return on their cash&#8230;let me explore that for a second&#8230;</p>
<p>&#8220;Angels tend to get involved in very early stage companies&#8230;&#8221; &#8211; in my case, the first $XXXK of funds were raised while I was still an employee elsewhere &#8211; at that time I had&#8230;a business plan and a prototype. THAT WAS IT~!</p>
<p>No customers, no employees, and no office &#8211; literally just a stack of pages I&#8217;d sweated blood and tears over and a prototype of a product that would go on to look very different.</p>
<p>What these angels were really investing in was ME! And I would guess that most Angels who go ahead and invest in a business ultimately make the decision not because of the business plan, the prototype or even the first few customer endorsements but because of the person with their hand out&#8230;</p>
<p>So &#8211; back to the money.  Angel investors get involved at the RISKIEST stage of a start-up &#8211; most start-ups don&#8217;t go anywhere and their money goes POP! Gone! Now even if Angels are people with a high net worth &#8211; they still (probably) worked hard to make it&#8230;so as, in the investor community, the angels tend to take the most risk &#8211; they also look for the highest multiplier on their money.</p>
<p>Multiplier?  Whassat? So &#8211; for example, they give $10K &#8211; if they get $100K back when there is some form of liquidity event then they have made 10X on their initial investment of $10K (i.e. $100K divided by their initial $10k).</p>
<p>As a for instance &#8211; I have heard of angels looking for 20 times or even 30 times of their money back. So, for that $10K, they would hope to get $200-$300K back from some form of liquidity event.</p>
<p>Liquidity event? Whassat? &#8230;that&#8217;s basically even that allows the investors to get some or all of their cash out. (Example &#8211; IPO, acquisition etc)</p>
<p>Bringing this full circle &#8211; So why Andrew &#8211; do you think that the Google results were too &#8216;money-centric&#8217;? Isn&#8217;t that what angels are all about?</p>
<p>Yes and No! In my view, the money you get from Angels tends to fall into one of three categories.</p>
<p>Either <strong>CHEAP MONEY, EXPENSIVE MONEY</strong> or just, plain old, <strong>MONEY</strong>!</p>
<p>Am I talking about the multiplier again? Absolutely not! The amount of multiplier you, as the entrepreneur, can guarantee to the angel investors is zero! You can guarantee absolutely nothing.  You business might go gangbusters and someone could come along and buy you for a fortune. Likewise, your business could go gangbusters and you could IPO or it could cease to get off the ground and their investment could be worth 5 cents &#8211; the multiplier the angels get could be very different with each scenario&#8230;you have no way of predicting what it will ultimately be&#8230;</p>
<p>So let me explain what I mean by cheap and expensive Angel money&#8230;it’s quite simple&#8230;</p>
<p>When I took angel money for my first start-up, it became obvious, very early on, that I had three types of investors:</p>
<p><strong><em>1)  The Value Add Investor:</em></strong></p>
<p>This is the investors that calls you up occasionally and is looking to help&#8230;they are opening up their contacts database and connecting you with other angels, advisors, entrepreneurs, suppliers or whomever&#8230;to help you and your business grow. Better yet, you talk on a weekly basis and they help you think through the challenges and the strategic questions you have for your business, they help open doors for you and even drive great recruits to your business and help close them so you increase your employee firepower!</p>
<p>Money from this kind of Angel &#8211; I call &#8220;Cheap Money&#8217; &#8211; because you get much more value than just the cash &#8211; it makes their money really worthwhile so whatever multiplier you ultimately pay, it was partially because these value add angels helped you every step of the way &#8211; their payout is cheap money. You get me?</p>
<p>That leads us to the other kind of Angel&#8230;</p>
<p><em><strong>2) The ‘Pain in the Ass’ Investor:</strong></em></p>
<p>There are some investors who, as soon as they give you the check, become an absolute pain in the rear.  From that moment forward, they believe they own you&#8230;no, not just a piece of your business (which they have)&#8230;but YOU!  They will call you 24/7&#8230;they will ask you to jump through hoops that may have very little to do with the businesses immediate needs and, they will tell you, loudly and often how bad a job you are doing and how you should be doing it some other way.</p>
<p>Their way ideally.</p>
<p>And do they open their contact database to help out? Rarely if ever.  Their function is to become a complete time sink and a constant annoyance.</p>
<p>I consider money from this kind of Angel&#8230;&#8221;Expensive Money&#8221;. Wouldn’t you?</p>
<p><strong>3) The Simple No Thrills Angel Investor:</strong></p>
<p>The third type of angel is just plain, old money &#8211; they give you the cash, you put it into the business and they are happy to get the monthly or weekly updates about how the business is going &#8211; their value is limited to the initial cash they may put in.</p>
<p>Now &#8211; before I finish this post &#8211; I want to leave you with the challenge the above creates&#8230;</p>
<p>Here&#8217;s the challenge &#8211; &#8220;You can&#8217;t tell which angels are going to be in category 1 or 2 or 3 until AFTER you have taken their cash and they&#8217;ve signed on the dotted line.&#8221;</p>
<p>Its true &#8211; you can interview and screen angels (if you have choices&#8230;and you ALWAYS have choices&#8230;even if it’s to bootstrap and use your credit card while working at a day job) and it’s tough to tell if they will add value or be the bane of your existence.</p>
<p>I hope the above has given you a few things to think about. And come back so I can take you through how I managed to have a higher chance of picking the value added Angels and getting &#8216;Cheap Money&#8217;.</p>
<p>Have you gone out and locked in Angel Investors? Any good stories about the experience or horror stories you’ve ‘heard’ from others?</p>
<p>Join my mailing list to the right if you want to get additional updates. My goal is to help with the challenges of fund raising for entrepreneurs, their startups and growing businesses.</p>
<p> Here&#8217;s to your startup success&#8230;</p>
<p>Andrew</p>
<h6 class="zemanta-related-title" style="font-size: 1em;">Related articles</h6>
<ul class="zemanta-article-ul">
<li class="zemanta-article-ul-li"><a href="http://billburnham.blogs.com/burnhamsbeat/2010/02/dont-take-angel-investments-from-vcs.html">Don&#8217;t Take Angel Investments From VCs</a> (billburnham.blogs.com)</li>
<li class="zemanta-article-ul-li"><a href="http://www.startupcfo.ca/?p=1191">The Smell Test</a> (startupcfo.ca)</li>
<li class="zemanta-article-ul-li"><a href="http://startups.com/questions/14168/angel-investment">Angel Investment</a> (startups.com)</li>
<li class="zemanta-article-ul-li"><a href="http://blog.startupprofessionals.com/2009/09/how-to-find-angel-with-wings.html">How to Find an Angel With Wings</a> (startupprofessionals.com)</li>
<li class="zemanta-article-ul-li"><a href="http://startups.com/questions/16647/downsides-of-getting-funding-from-an-angel-vc">Downsides of getting funding from an Angel / VC</a> (startups.com)</li>
</ul>
<div class="zemanta-pixie" style="margin-top: 10px; height: 15px;"><a class="zemanta-pixie-a" title="Reblog this post [with Zemanta]" href="http://reblog.zemanta.com/zemified/855135c3-cd33-4751-9461-e0458801cc04/"><img class="zemanta-pixie-img" style="float: right;" src="http://img.zemanta.com/reblog_e.png?x-id=855135c3-cd33-4751-9461-e0458801cc04" alt="Reblog this post [with Zemanta]" /></a><span class="zem-script more-related pretty-attribution"><script src="http://static.zemanta.com/readside/loader.js" type="text/javascript"></script></span></div>
<p>Related posts:<ol>
<li><a href='http://www.thefundingguru.com/how-to-get-cheap-money-for-your-startup-part-2.html/' rel='bookmark' title='How to Get Cheap Money for Your Startup (Part 2)'>How to Get Cheap Money for Your Startup (Part 2)</a></li>
<li><a href='http://www.thefundingguru.com/what-are-angel-investors-looking-for-the-six-key-motivations-of-angel-investors-2.html/' rel='bookmark' title='What are Angel Investors Looking For? The Six Key Motivations of Angel Investors (#2)'>What are Angel Investors Looking For? The Six Key Motivations of Angel Investors (#2)</a></li>
<li><a href='http://www.thefundingguru.com/what-are-angel-investors-looking-for-six-key-motivations-of-angel-investors-4.html/' rel='bookmark' title='What Are Angel Investors Looking For? Six Key Motivations of Angel Investors (#4)'>What Are Angel Investors Looking For? Six Key Motivations of Angel Investors (#4)</a></li>
</ol></p>]]></content:encoded>
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		<title>What Are Angel Investors Looking For? The Six Key Motivations of Angel Investors (#3)</title>
		<link>http://www.thefundingguru.com/what-are-angel-investors-looking-for-3.html/</link>
		<comments>http://www.thefundingguru.com/what-are-angel-investors-looking-for-3.html/#comments</comments>
		<pubDate>Fri, 05 Feb 2010 20:27:15 +0000</pubDate>
		<dc:creator>Andrew</dc:creator>
				<category><![CDATA[How To]]></category>
		<category><![CDATA[Raising Money]]></category>
		<category><![CDATA[The Funding Guru]]></category>
		<category><![CDATA[angel]]></category>
		<category><![CDATA[angel investor]]></category>
		<category><![CDATA[raise funds]]></category>

		<guid isPermaLink="false">http://www.thefundingguru.com/?p=712</guid>
		<description><![CDATA[One of the top ten most all time popular questions relating to Angel investors (aside from "Where the heck can I find them...") is "What are angel investors looking for?" or "What are the main motivations of angel investors?"
Related posts:<ol>
<li><a href='http://www.thefundingguru.com/what-are-angel-investors-looking-for-the-six-key-motivations-of-angel-investors-2.html/' rel='bookmark' title='What are Angel Investors Looking For? The Six Key Motivations of Angel Investors (#2)'>What are Angel Investors Looking For? The Six Key Motivations of Angel Investors (#2)</a></li>
<li><a href='http://www.thefundingguru.com/what-are-angel-investors-looking-for-or-the-six-critical-motivations-of-angel-investors-1.html/' rel='bookmark' title='What are Angel Investors Looking For? The Six Key Motivations of Angel Investors (#1)'>What are Angel Investors Looking For? The Six Key Motivations of Angel Investors (#1)</a></li>
<li><a href='http://www.thefundingguru.com/what-are-angel-investors-looking-for-six-key-motivations-of-angel-investors-4.html/' rel='bookmark' title='What Are Angel Investors Looking For? Six Key Motivations of Angel Investors (#4)'>What Are Angel Investors Looking For? Six Key Motivations of Angel Investors (#4)</a></li>
</ol>]]></description>
			<content:encoded><![CDATA[<h2><span style="color: #333333;"></p>
<div id="attachment_716" class="wp-caption alignnone" style="width: 279px"><a href="http://www.thefundingguru.com/wp-content/uploads/2010/02/skydive.jpg"><img class="size-medium wp-image-716" title="angel investor" src="http://www.thefundingguru.com/wp-content/uploads/2010/02/skydive-269x300.jpg" alt="Key Angel Investor Motivations #3" width="269" height="300" /></a><p class="wp-caption-text">Key Angel Investor Motivations #3</p></div>
<p>Welcome to the third installment of &#8220;The Six Key Motivations of Angel Investors #3&#8243;</p>
<p></span></h2>
<p>The first article is <a href="http://www.thefundingguru.com/what-are-angel-investors-looking-for-or-the-six-critical-motivations-of-angel-investors-1/" target="_blank">here</a> and the second <a href="http://www.thefundingguru.com/what-are-angel-investors-looking-for-the-six-key-motivations-of-angel-investors-2/" target="_blank">here</a> &#8211; just in case you missed them&#8230;</p>
<p>So what are these articles all about?</p>
<p>One of the top ten most all time popular questions relating to Angel investors (aside from &#8220;Where the heck can I find them&#8230;&#8221;) is &#8220;What are angel investors looking for?&#8221; or &#8220;What are the main motivations of angel investors?&#8221;</p>
<p>Its just too easy and frankly a real missed opportunity just to say or think &#8220;to make lots of dough&#8230;&#8221;</p>
<p>If we consider that Angel Investors are accredited investors then making more dough is unlikely to be at the top of their motivation list and having had my own share of angel investors for my businesses, the profit motive was high up there but certainly not the only motivation and rarely at the top of that list.</p>
<p>I put forward that aside from financial return, contribution was also a key motivator for many angel investors. I personally subscribe to the thinking that once you are &#8216;secure&#8217; a different set of needs kick in.  So, aside from Contribution what do I believe is the 3rd Motive for Angel Investors?</p>
<p>Consider the accredited investor &#8211; what are they?</p>
<p>An accredited investor according to Rule 501 of Regulation D of the Securities Act of 1933 is a few things but the important sentences for most entrepreneurs are:</p>
<ul>
<li>a natural person who has individual net worth, or joint net worth with the person’s spouse, that exceeds $1 million at the time of the purchase;</li>
<li>a natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year;</li>
</ul>
<p>Stepping outside of the legal verbiage &#8211; accredited investors are High Net Worth individuals, according to the World Wealth report written by Cap Gemini &amp; Merrill Lynch, there are over 10 million people considered High Net Worth and there’s also a group out there in the Ultra High Net Worth Category who’s assets are worth over $30M (the UHNW definition).</p>
<p>Now I’ve seen all types of data which suggest how many accredited investors there are, how they are spread across the globe, the growth rates of their numbers and so on – but I have seen no studies that say how they made their money.</p>
<p>Given I’m just guessing here – I’m going to think about those people I know who fall within their ranks and think through how they became accredited investors – and they fall into a few categories as follows:</p>
<p>1)       They made the money from starting companies</p>
<p>2)      They are doctors, lawyers, surgeons or some other lucrative profession or</p>
<p>3)      They inherited the money</p>
<p>So why is this all relevant?</p>
<p>Well, it leads me into what I believe is the third motivation of angel investors and it resonates strongly with some of the angels that have invested in my businesses.</p>
<p>Key Angel Investor Motivation #3 is the <span style="color: #888888;"><strong>&#8220;Vicarious thrill&#8221;.</strong></span></p>
<p>For those people who made their money starting their own businesses – the days when they can feel that first time thrill of seeing their startup baby taking their first steps have passed. If they’ve started and built companies – that deflowering of their startup virginity has already occurred – they cannot personnaly experience that unique thrill again. But they can invest in others and tap into that breath sucking in exhilaration of watching another entrepreneur crest that challenging hill…</p>
<p>For those that made their high net worth as Doctors or Dentist – investing in a young entrepreneur and startup allows them to get a real insight into a different set of experiences, to play a part in something outside of their current daily lives – why did angels start by investing in Broadway shows – the majority of which flopped? So they could do something exciting, so they could get their “vicarious thrill’.</p>
<p>I have a strong mental picture of one of my angel investors who had built one of the most popular pizza chains in Europe only to sell out for more cash than he can ever spend…in my view he invested in my first company because he wanted to make a contribution and he really enjoyed being a part of starting and growing a business – he went on to create more businesses of his own, to buy small failing businesses to turn them around, but he is was also a big supporter of entrepreneurs.  In my opinion, he enjoyed the experience of the startup either directly or once removed.</p>
<p>Financial return was NOT the main motivator.</p>
<p>Consider motive number 3 when hunting for your angel, when locking them in and working with them ongoing. Critical to engage them are the ups and the downs of your business – the challenges just as much as the successes – at the end of the day, and this is hyper important stuff…</p>
<p>…one of the BEST things about starting a business and stepping outside of corporate life is the ability to be true to yourself and your business. Don’t make the mistake of letting your need for the money mean that you choose the wrong angel investors. You are not looking to exchange that angel investor cash for a new boss…if you want a boss, stay where you are and don’t start a business.</p>
<p>If you’ve already raised cash from angel investors I’d really appreciate hearing about your experiences – other readers would find it helpful too…if you are about to raise cash, where are you going to look? How are you going to find your angels?</p>
<p>If you’ve found this useful or thought provoking sign up to get email updates on the right side of the page.</p>
<p>Here’s to your startup success!</p>
<p>Best</p>
<p>Andrew</p>
<p>Ps: For those who are committed to raising funds for their business – this might help…</p>
<p><a href="http://www.thefundingguru.com/1of10.html">http://www.TheFundingGuru.com/1of10.html</a></p>
<p>Related posts:<ol>
<li><a href='http://www.thefundingguru.com/what-are-angel-investors-looking-for-the-six-key-motivations-of-angel-investors-2.html/' rel='bookmark' title='What are Angel Investors Looking For? The Six Key Motivations of Angel Investors (#2)'>What are Angel Investors Looking For? The Six Key Motivations of Angel Investors (#2)</a></li>
<li><a href='http://www.thefundingguru.com/what-are-angel-investors-looking-for-or-the-six-critical-motivations-of-angel-investors-1.html/' rel='bookmark' title='What are Angel Investors Looking For? The Six Key Motivations of Angel Investors (#1)'>What are Angel Investors Looking For? The Six Key Motivations of Angel Investors (#1)</a></li>
<li><a href='http://www.thefundingguru.com/what-are-angel-investors-looking-for-six-key-motivations-of-angel-investors-4.html/' rel='bookmark' title='What Are Angel Investors Looking For? Six Key Motivations of Angel Investors (#4)'>What Are Angel Investors Looking For? Six Key Motivations of Angel Investors (#4)</a></li>
</ol></p>]]></content:encoded>
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		<title>Need funds for your startup?</title>
		<link>http://www.thefundingguru.com/need-funds-for-your-startup.html/</link>
		<comments>http://www.thefundingguru.com/need-funds-for-your-startup.html/#comments</comments>
		<pubDate>Wed, 03 Feb 2010 10:00:49 +0000</pubDate>
		<dc:creator>Andrew</dc:creator>
				<category><![CDATA[How To]]></category>
		<category><![CDATA[Raising Money]]></category>
		<category><![CDATA[angels]]></category>
		<category><![CDATA[venture capital]]></category>

		<guid isPermaLink="false">http://www.thefundingguru.com/?p=692</guid>
		<description><![CDATA[ So flip your thinking – if you have already tried to raise capital from different angels or a handful or more of venture capitalists and haven’t locked that cash in yet…the problem isn’t with the investors you’ve been speaking with – I can tell you…without knowing anything about you or your business…that you and how you are going about raising the money you need, are the problem.
Related posts:<ol>
<li><a href='http://www.thefundingguru.com/help-raising-funds-for-startups-the-dragon-slayer.html/' rel='bookmark' title='Help Raising Funds for Startups: The Dragon Slayer'>Help Raising Funds for Startups: The Dragon Slayer</a></li>
</ol>]]></description>
			<content:encoded><![CDATA[<p>There are books, blogs, websites and gurus spanning just about every element of starting and running a business – in fact, there are so many types of help and expertise available, some even free, that you would expect it would be near impossible for a new business or entrepreneur to fail.  Surely with all that fantastic help and all those free resources we can all be starting and building successful businesses like mushrooms?</p>
<div id="attachment_695" class="wp-caption alignnone" style="width: 310px"><a href="http://www.thefundingguru.com/wp-content/uploads/2010/02/walking.jpg"><img class="size-full wp-image-695" title="Seize The Day - Don't Wait!" src="http://www.thefundingguru.com/wp-content/uploads/2010/02/walking.jpg" alt="Seize The Day - Don't Wait!" width="300" height="300" /></a><p class="wp-caption-text">Seize The Day - Don&#39;t Wait!</p></div>
<p>Unfortunately, despite more resources than an entrepreneur can shake a stick at, the data of startup successes and failures has changed little over the decades – sadly, about nine in every ten companies still fail within their first few years, leaving behind the shells of companies that could have made it, along with the dreams of their founders.  But what has become clear, with the successful growth of companies like Microsoft, Google and Facebook and others, is that starting a company is perhaps the best track to achieving billionaire status through the creation and the ultimate sale of that business to the public market or a much larger company. In recent years, so many fortunes have been made and so quickly, that this era is unlike any in human history. Company founders are making more money, more quickly than ever before.</p>
<p>The question I think those of us who have the inner need to build businesses need to ask is – how are they doing it and can we do it too?</p>
<p>This time will soon pass and which of us want to look back and realize that the best opportunity of our lives was right in front of us and we had failed to grab it?</p>
<p>So again, how do people start and grow successful world changing businesses?</p>
<p>The answer to that question is broad but one thing I know for sure – funding and how and when its used – is a critical element.  When ever a business fails, central to that failure is nearly always the fact that business ran out of money and in my mind there are usually two reasons for that….</p>
<p>Either the processes and systems which underpin the business are flawed or the funding strategy and its execution are flawed.</p>
<p>Knowing when, how and under what terms to raise funds (and from whom) is critical for any companies foundation, growth and ultimate success.</p>
<p>I have spent the last twenty years focused on trying to understand what makes an entrepreneur and a startup successful.  I started my first company at college and over the last twenty years have both started and helped others start many businesses. In 1995, I left England and came to the United States to attend Harvard Business School and from the beginning, focused on getting under the covers of what makes a startup and an entrepreneur successful. While at Harvard, you guessed it….I started another business from my dorm room, a business that Inc Magazine called “One of the Hottest Startups of the Year” which ultimately paid out seven figures to its shareholders.</p>
<p>Returning to the United Kingdom, I focused on two projects – first, fixing a three hundred year old bank with a handful of business builders and sitting on the Board of the Department of Trade &amp; Industry where I joined twenty entrepreneurs rigorously chosen by the UK government to advise them on startups and entrepreneurial ventures. My area of focus was funding and how critical it is to startup success.</p>
<p>Anyone that knows me well would probably be surprised that I focused on the fund raising side of the entrepreneurial equation – raising funds seems so ‘dry’ right?  I am what most would consider a people focused business builder – why did I focus on fund raising?</p>
<p>Its simple – having started multiple businesses and having helped friends start businesses, in my opinion its often the lack of the right kind of funding at the different stages of the business that cause many to fail. Raising capital may seem dry but just like any part of the successful startup fund raising equation – it’s both a science and an art form.</p>
<p>Like I said before, I am NOT a finance guy…I think if you persuaded someone at Harvard Business School to show you my transcripts from the finance test – you&#8217;ll probably laugh your ass off&#8230;from memory it was a ‘pass’ at best. I wish I could tell you the exact percentage but I’ve blocked it out as too painful to remember. But what I have done is go through the sometimes tortuous cycle of raising capital for businesses from angels and venture capitalists. I probably spent a full year or more walking up and down <a class="zem_slink freebase/en/sand_hill_road" title="Sand Hill Road" rel="wikipedia" href="http://en.wikipedia.org/wiki/Sand_Hill_Road">Sand Hill Road</a>, the Venture Capital ‘Strip’ in Silicon Valley, looking for funds for one of my start-ups and a few more times after that with friends for their startups and high growth companies.</p>
<p>I’d like to underscore that last point – while building a business, I spent just about a full year diverting some of my attention and energy from the core business so I could focus on raising funds for it. At this point you may be saying – wow!  A year! Surely it didn’t take a full year? Well having hung out in too many coffee shops (read – free office space) and talking with other entrepreneurs walking up and down the same Venture Capital strip – spending up to a year to raise capital is not unusual. After all, we’re talking about a process which, if successful, can mean an injection of millions of dollars into your business while adding a seriously connected and motivated investors to the team.</p>
<p>But a year? Seems like an awfully long time right… (<a href="http://www.TheFundingGuru.com/Supercharger.html" target="_blank">Short cut?</a>)</p>
<p>Its true – and part of the reason for it taking that long was because I was learning the whole time…I was learning to raise decent amounts of investor capital.  Each meeting I managed to get, each presentation I prepared for and made, each lunch and negotiation I had was all part of the learning curve.  When I add up all the time spent raising capital, both from angels and from VCs – its quite a few years of learning.  Add to that the time I spent on the board of the Department of Trade &amp; Industry for the UK government and fund raising has been a critical element of the startup process.</p>
<p>NOTE: Part of the reason why it’s an intense process if because it’s a serious amount of money.  The first Venture Capital round I completed brought in just over $5m to the business…and that number increased – for example, the next Venture Capital funds I raised came to just over $15m.</p>
<p>…but despite fund raising being a critical element of the startup process – I’ve found little real support for people starting businesses.  Yes there are blogs and sites that will take you through the bare essentials of what an angel and a <a class="zem_slink freebase/guid/9202a8c04000641f8000000000198959" title="Venture capital" rel="wikipedia" href="http://en.wikipedia.org/wiki/Venture_capital">venture capitalist</a> are, their addresses, websites and even some of the difference between them all. But I still haven’t been able to find a step by step system that helps a person starting and growing business to raise the funds they need. Like any process, there are ways to do it well and pitfalls to avoid – yes, you can spend a year or so focused on raising the cash you need for your business and who knows, maybe you’ll get lucky and it will take only six months.</p>
<p>Or if you are here, maybe you’ve already started that process and are surprised at how tough its been so far to raise the money you need. One idea I’d like to get across right now is if you have already started on the pathway to raise capital and are finding it hard – you are probably thinking that Venture Capitalists and Angels are all tough S.O.Bs that wouldn’t know a good investment if it kicked them in the pants.  I’d like you to think about flipping your thinking…Why? Because I can absolutely state – without knowing which Angels or Venture Capitalists you’ve spoken too (if any!) – that they would like nothing better than to find the perfect company to invest in. If they met with the company they believed were perfect for them tomorrow – they WOULD invest. That’s their business, its why they get out of bed in the morning and how they pay for their kids braces and how they expect to send them to college.</p>
<p>So flip your thinking – if you have already tried to raise capital from different angels or a handful or more of venture capitalists and haven’t locked that cash in yet…the problem isn’t with the investors you’ve been speaking with – I can tell you…without knowing anything about you or your business…that your business, you and how you are going about raising the money you need, are the problem.</p>
<p>As I said – its part science and part art – oh yeah, and luck has its role to play too.  This system will help with the science and art parts – if you get those elements right, the luck will probably take care of itself. After all, luck can only do so much…and if you do it right, you can help create your own luck. But if you want to just rely on luck, why not try all those free resources – after all, only 9 out of every 10 companies fail using that route.  You might find out, after a year or two, that you were one of the lucky ones…</p>
<p>Interested in finding out <a href="http://www.TheFundingGuru.com/Supercharger.html">more?</a></p>
<p>Join my email list and I’ll send you an update when we have more information.</p>
<p>Good luck with your funding.</p>
<p>Andrew</p>
<p>PS: Here&#8217;s a<a href="http://www.TheFundingGuru.com/Supercharger.html"> taster of the course</a> which will help your fund raising</p>
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<li class="zemanta-article-ul-li"><a href="http://entrepreneur.venturebeat.com/2010/02/11/our-secret-to-getting-funded/">Our secret to getting funded</a> (entrepreneur.venturebeat.com)</li>
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<div class="zemanta-pixie" style="margin-top: 10px; height: 15px;"><a class="zemanta-pixie-a" title="Reblog this post [with Zemanta]" href="http://reblog.zemanta.com/zemified/1882f878-2650-4f3a-a0c8-cafb5e097c08/"><img class="zemanta-pixie-img" style="border: none; float: right;" src="http://img.zemanta.com/reblog_e.png?x-id=1882f878-2650-4f3a-a0c8-cafb5e097c08" alt="Reblog this post [with Zemanta]" /></a><span class="zem-script more-related more-info pretty-attribution"><script src="http://static.zemanta.com/readside/loader.js" type="text/javascript"></script></span></div>
<p>Related posts:<ol>
<li><a href='http://www.thefundingguru.com/help-raising-funds-for-startups-the-dragon-slayer.html/' rel='bookmark' title='Help Raising Funds for Startups: The Dragon Slayer'>Help Raising Funds for Startups: The Dragon Slayer</a></li>
</ol></p>]]></content:encoded>
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		<title>What are Angel Investors Looking For? The Six Key Motivations of Angel Investors (#2)</title>
		<link>http://www.thefundingguru.com/what-are-angel-investors-looking-for-the-six-key-motivations-of-angel-investors-2.html/</link>
		<comments>http://www.thefundingguru.com/what-are-angel-investors-looking-for-the-six-key-motivations-of-angel-investors-2.html/#comments</comments>
		<pubDate>Tue, 02 Feb 2010 10:00:09 +0000</pubDate>
		<dc:creator>Andrew</dc:creator>
				<category><![CDATA[How To]]></category>
		<category><![CDATA[Raising Money]]></category>
		<category><![CDATA[The Funding Guru]]></category>
		<category><![CDATA[angel]]></category>
		<category><![CDATA[angel investor]]></category>
		<category><![CDATA[Business]]></category>
		<category><![CDATA[entrepreneur]]></category>
		<category><![CDATA[Financial services]]></category>
		<category><![CDATA[fund raising]]></category>
		<category><![CDATA[Investment]]></category>
		<category><![CDATA[investor]]></category>
		<category><![CDATA[key]]></category>
		<category><![CDATA[motivation]]></category>
		<category><![CDATA[National Public Radio]]></category>
		<category><![CDATA[venture capital]]></category>

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		<description><![CDATA[One of the best Angel Investors I ever had was Professor Howard Stevenson - while driving through Princeton's leafy backroads recently I had my radio tuned to NPR and was listening to Fresh Air or some such audio contribution to my ears and brain - I'm a sucker for public radio....what can I say - and after the show wrapped up, the radio broadcaster went into their 'sponsor' regurgitation telling me and anyone else listen who's dollars had made that particularly good show possible.  In this case I almost swerved off the troad to hear that Howard Stevenson and his wife's fund had paid for the radio show I'd just enjoyed.  Now that was the second time I had enjoyed the output of something that Howard had contributed too...and the reason I say that is because Howard Stevenson was my first ever angel investor in my first real company.
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<li><a href='http://www.thefundingguru.com/what-are-angel-investors-looking-for-six-key-motivations-of-angel-investors-4.html/' rel='bookmark' title='What Are Angel Investors Looking For? Six Key Motivations of Angel Investors (#4)'>What Are Angel Investors Looking For? Six Key Motivations of Angel Investors (#4)</a></li>
<li><a href='http://www.thefundingguru.com/what-are-angel-investors-looking-for-3.html/' rel='bookmark' title='What Are Angel Investors Looking For? The Six Key Motivations of Angel Investors (#3)'>What Are Angel Investors Looking For? The Six Key Motivations of Angel Investors (#3)</a></li>
<li><a href='http://www.thefundingguru.com/what-are-angel-investors-looking-for-or-the-six-critical-motivations-of-angel-investors-1.html/' rel='bookmark' title='What are Angel Investors Looking For? The Six Key Motivations of Angel Investors (#1)'>What are Angel Investors Looking For? The Six Key Motivations of Angel Investors (#1)</a></li>
</ol>]]></description>
			<content:encoded><![CDATA[<div id="attachment_705" class="wp-caption alignnone" style="width: 310px"><p class="wp-caption-text">Six Key Motivations for Angel Investors #2</p></div> Welcome to the next installment of &#8230;. The Six Key Motivations of Angel Investors (#2) (Here&#8217;s a link to the first article) Now during the first riveting installment I tackled the most common and probably the most predominant motivation of angel investors &#8211; the [...]<p>Related posts:<ol>
<li><a href='http://www.thefundingguru.com/what-are-angel-investors-looking-for-six-key-motivations-of-angel-investors-4.html/' rel='bookmark' title='What Are Angel Investors Looking For? Six Key Motivations of Angel Investors (#4)'>What Are Angel Investors Looking For? Six Key Motivations of Angel Investors (#4)</a></li>
<li><a href='http://www.thefundingguru.com/what-are-angel-investors-looking-for-3.html/' rel='bookmark' title='What Are Angel Investors Looking For? The Six Key Motivations of Angel Investors (#3)'>What Are Angel Investors Looking For? The Six Key Motivations of Angel Investors (#3)</a></li>
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</ol></p>]]></content:encoded>
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		<title>What are Angel Investors Looking For? The Six Key Motivations of Angel Investors (#1)</title>
		<link>http://www.thefundingguru.com/what-are-angel-investors-looking-for-or-the-six-critical-motivations-of-angel-investors-1.html/</link>
		<comments>http://www.thefundingguru.com/what-are-angel-investors-looking-for-or-the-six-critical-motivations-of-angel-investors-1.html/#comments</comments>
		<pubDate>Sun, 31 Jan 2010 22:25:44 +0000</pubDate>
		<dc:creator>Andrew</dc:creator>
				<category><![CDATA[How To]]></category>
		<category><![CDATA[Raising Money]]></category>
		<category><![CDATA[Series]]></category>
		<category><![CDATA[angel]]></category>
		<category><![CDATA[fund raising]]></category>
		<category><![CDATA[investor]]></category>
		<category><![CDATA[key]]></category>
		<category><![CDATA[motivations]]></category>
		<category><![CDATA[venture]]></category>

		<guid isPermaLink="false">http://www.thefundingguru.com/?p=654</guid>
		<description><![CDATA[Angels are usually motivated by more than one of the key angel investor motivations - but understanding their key driver is critical both before and after they become your angel investor. By understanding this - you can align their interests and yours and negotiate the best deal for you, your business and your investors. Finding an angel predominantly motivated by financial return is neither a positive or a negative - but by identifying that financial return is a key motivator is critical so you know what information to emphasis during and after the negotiation. A good rule of thumb with ALL investors is communicate clearly and honestly about your business (even the problems and challenges - actually especially the problems and the challenges....), now you understand their primary motivation, keep that in mind during all interactions and focus on driving your business forward making sure you achieve the milestones you set and agreed with the angel when you established your relationship.
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</ol>]]></description>
			<content:encoded><![CDATA[<div id="attachment_677" class="wp-caption alignnone" style="width: 310px"><a href="http://www.thefundingguru.com/wp-content/uploads/2010/01/treasure-chest.jpg"><img class="size-medium wp-image-677" title="treasure chest" src="http://www.thefundingguru.com/wp-content/uploads/2010/01/treasure-chest-300x292.jpg" alt="Critical Motivations for Angel Investors" width="300" height="292" /></a><p class="wp-caption-text">Key Motivations for Angel Investors</p></div>
<p>I was recently asked &#8220;What are angel investors looking for?&#8221;</p>
<p>My knee jerk response was &#8220;a significant return on their investment&#8230;&#8221;</p>
<p>&#8230;and like most knee jerks responses, I was both right and wrong at the same time and (and this is probably where the phrase comes from&#8230;) I was a bit of a <em>jerk</em> for not thinking it through better&#8230; <img src='http://www.thefundingguru.com/wp-includes/images/smilies/icon_smile.gif' alt=':)' class='wp-smiley' /> </p>
<p>Yes &#8211; when an angel invests in a business they are likely looking for a significant return on their investment but that return is isn&#8217;t necessarily just measured in dimes, cents, dollars or whichever currency they happen to be dealing in.</p>
<p>So with a good cup of coffee I sat down to think through and home in on what &#8216;Returns&#8217; an angel investors might be looking for when they make an investment &#8211; in other words, &#8216;What are the key motivations for angel investors?&#8221;</p>
<p>Now before I launch in &#8211; consider that angels are people and will be motivated by multiple reasons and what motivates them today, may not be what motivates them tomorrow. But I would suggest that there are primary and secondary motivations and by understanding them as an entrepreneur &#8211; you are ahead of the game&#8230;.and by ahead of the game, I mean you are more likely to be able to lock in an angel investor and keep them in your corner if you identify and consider their key motivations. Look for the verbal and body language clues and once you’ve figured them out, keep them in the back of your mind because these are the engines which are potentially driving your angel today and during your ongoing relationship&#8230;</p>
<p>This week I thought I would examine what I’m calling &#8216;the Six Key Motivations of Angel Investors&#8217;</p>
<p><strong>The Six Key Motivations of Angel Investors:</strong></p>
<p>Motivation #1: A Financial Return<br />
Angels back entrepreneurs and young businesses &#8211; a key motivation for doing so is to see that investment increase in value to the point where, at some stage in the future, they can gain the benefit of that increased value through some form of return.</p>
<p>Angel investors who are driven by the financial return &#8216;win&#8217; when they invest in a business which goes on to increase in value by a significant multiple and when they can withdraw that financial return through some for of liquidity event &#8211; a term meaning some form of occurrence which makes the investment they acquired transferable into cash. These occurrences usually take the form of the company being acquired or being able to offer its shares through a public market of some kind.</p>
<p>Example &#8211; you invest in company A and get 1 of 10 shares for $1 (keeping it simple). If that company is then purchased and the company purchasing pays $5 for those shares &#8211; that purchase is the &#8216;liquidity event&#8217; which allows the angel to sell their 1 share and gain the $5 offered for their share.</p>
<p>Some angel investors are focused on making a significant financial return &#8211; perhaps they are using these funds as a way of increasing their retirement income &#8211; angels who invest early enough can purchase a piece of a company at a reasonable price &#8211; but the earlier in the company&#8217;s life &#8211; the less visible the company&#8217;s future and therefore the higher the risk.</p>
<p>If we could all place a bet on a horse just before its about to cross the finishing line then we&#8217;d all make money gambling &#8211; the challenge is to make a winning bet before the race begins or when its in the first few seconds. The better an angel is at picking those winners early &#8211; the more likely they are that they will make mega returns on their investments &#8211; we call them investments but really the angel is gambling just like on a race. If you are the entrepreneur, you are the horse and the reason why you get asked some many questions during the due diligence stage is because the angel is checking out your pedigree and looking at your metaphorical teeth. Enjoy!</p>
<p>There are a few important facets to the financial return that investors are looking for &#8211; in the above over simplified example an angel buys 1 share and eventually gets to sell it for a multiple of the initial investment because there is an event (in this case a purchase) which allows them to transfer that share of ownership into cash. In many cases companies go through more than one round of fund raising &#8211; most go through multiple rounds. A round is just one way of saying &#8216;times&#8217;. So an entrepreneur sells 20% of the stock in their company round 1. During the next round (round 2) they create more shares and sell some more shares &#8211; during the second round the first group of investors often get asked if they also want to buy shares in the second round. Why is this important?</p>
<p>Because by selling more shares in the second round, the ownership percentage of the initial investors goes down unless they buy more shares equal to their original percentage in the second round.</p>
<p>Example: angel investors focused on a financial return consider two factors above all else: how much money they&#8217;re putting in, and the valuation of the company. The valuation of the company (i.e. how much it is valued to be worth) determines how much stock you give the angel. If an angel puts in $100,000 into a company at a pre-money (i.e. before the money is put in) valuation of $1 million, then the post-money valuation is $1.1 million (i.e. the pre-money valuation + the value of the investment&#8230;get it?), and the angel gets .1/1.10, or 9.1% of the company&#8217;s stock.</p>
<p>If your company raises a second round, the company will be divided among a larger number of investors which reduces their overall percentage (because you are dividing a slightly bigger cake among more people). If in the next round they sell 10% of the company to a new investor, your 9.1% will be reduced.</p>
<p>So if an angel is motivated by the financial return above all else &#8211; this dilution of their ownership stake will be important for them. You may find your initial investors being particularly active during the negotiations of company valuation in subsequent rounds. Interestingly, the motivations of founders are often aligned with the angels &#8211; they aren&#8217;t took keen on their ownership percentage being diluted either.</p>
<p>So if they are focused on financial return why will they allow their percentage to be reduced?</p>
<p>Because its being diluted by adding more cash to the company &#8211; the new shareholders brings in new cash, new contacts, new experience and increase the company&#8217;s potential for success. The early angels will often work with the founders to consider the new investors in terms of the whole package &#8211; i.e. all they can bring to increase the company&#8217;s trajectory and likelihood of success.</p>
<p>When talking with a potential angel consider the questions they are asking you and use that as a guide to what is this angel motivation for investing. If financial return is their key motivation &#8211; you&#8217;ll know what elements will drive their interaction with you both during the negotiations before they invest and their interactions with you after they invest. Investors who&#8217;s key motivation is delivering a significant financial return will emphasis valuation, dilution and achieving milestones towards a defined and reachable liquidity event. Angels are usually motivated by more than one of the key angel investor motivations &#8211; but understanding their key driver is critical both before and after they become your angel investor. By understanding this &#8211; you can align their interests and yours and negotiate the best deal for you, your business and your investors. Finding an angel predominantly motivated by financial return is neither a positive or a negative &#8211; but by identifying that financial return is a key motivator is critical so you know what information to emphasis during and after the negotiation. A good rule of thumb with ALL investors is communicate clearly and honestly about your business (even the problems and challenges &#8211; actually especially the problems and the challenges&#8230;.), now you understand their primary motivation, keep that in mind during all interactions and focus on driving your business forward making sure you achieve the milestones you set and agreed with the angel when you established your relationship.</p>
<p>If you do that then their need for certainty and predictability will be fulfilled and you will be more likely to have happy investors who will back you today and with luck, with all your ventures in the future.</p>
<p>Questions on the first key motivation for Angel Investors?  Reach out via the contact page above and join my mailing list by adding your name and email in the box to the right. I&#8217;ll also send you some valuable downloads to help&#8230;</p>
<p>Andrew</p>
<p>PS:  and here&#8217;s an interesting video with some good perspectives so you can start getting into the heads of the better angels&#8230;</p>
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<p>Related posts:<ol>
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</ol></p>]]></content:encoded>
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		<title>Great Tips for Starting a Catering Business: Inspirational</title>
		<link>http://www.thefundingguru.com/great-tips-for-starting-a-catering-business-inspirational.html/</link>
		<comments>http://www.thefundingguru.com/great-tips-for-starting-a-catering-business-inspirational.html/#comments</comments>
		<pubDate>Mon, 25 Jan 2010 15:17:25 +0000</pubDate>
		<dc:creator>Andrew</dc:creator>
				<category><![CDATA[How To]]></category>
		<category><![CDATA[Podcast]]></category>
		<category><![CDATA[Raising Money]]></category>
		<category><![CDATA[Business]]></category>
		<category><![CDATA[catering]]></category>
		<category><![CDATA[chef khalil]]></category>
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		<category><![CDATA[Health]]></category>
		<category><![CDATA[Small business]]></category>
		<category><![CDATA[Starting a business]]></category>
		<category><![CDATA[Startup]]></category>
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		<category><![CDATA[Today]]></category>
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		<description><![CDATA[Tips for Bootstapping A Catering Company (MP3 Download Below) Today&#8217;s posting is an inspirational podcast.  If you have an interest in starting a catering business then you must listen to this interview. There are some critical elements in today&#8217;s interview with Chef Khalil that I&#8217;d like to call out&#8230; Chef Khalil has leveraged his passion [...]
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			<content:encoded><![CDATA[<p><a href="http://www.thefundingguru.com/wp-content/uploads/2010/01/Chef_Khalil2.mp3">Tips for Bootstapping A Catering Company</a></p>
<p>(MP3 Download Below)</p>
<p>Today&#8217;s posting is an inspirational podcast.  If you have an interest in starting a catering business then you must listen to this interview.</p>
<p>There are some critical elements in today&#8217;s interview with Chef Khalil that I&#8217;d like to call out&#8230;</p>
<p>Chef Khalil has leveraged his passion to not only start a business with different revenue streams but he&#8217;s also using his passion and common sense approach to growing a business which is making a difference to kids and other people.</p>
<p>There are many elements to take out of this interview but the one&#8217;s which I gained are:</p>
<ul>
<li><span style="color: #000000;">Constantly learning &#8211; taking courses, signing up to news letters in your space, keeping up to speed on your area, never resting on the accomplishments you’ve had but be constantly growing and striving</span></li>
<li><span style="color: #000000;">Finding mentors who can teach you – even if it means working for free</span></li>
<li><span style="color: #000000;">Steady growth &#8211; don&#8217;t assume instant success, test the waters, plan and don&#8217;t over-extend yourself either financially or emotionally – keep a balance in your life</span></li>
<li><span style="color: #000000;">Sacrifice &#8211; Chef Khalil re-invested his profit into his business while managing his startup and a full time job – he knew what he wanted to achieve and was focused on achieving it</span></li>
<li><span style="color: #000000;">Partnering &#8211; Its common for companies to leverage affiliates and partnerships online  but Chef Khalil is using this approach for his culinary business &#8211; its always possible to leverage partners and your community for any business</span></li>
<li><span style="color: #000000;">Vision &#8211; know where you are going,  why you&#8217;re going to get there then figure out the how and do it</span></li>
</ul>
<p>So &#8211; I highly recommend that you listen to this brief interview with Chef Khalil &#8211; its inspiring because he is using his passion to help others but his common sense approach to business should be a course taught in every business school throughout the country – especially in this time of economic challenge. The key thought I took out is – if you want to be your own boss, you can achieve your goal if you have a passion, a commitment and are prepared to sacrifice to achieve it – even if it takes time – because, everything worth anything ‘always’ takes time…it doesn’t matter if we’re talking business, personal life or a good bottle of wine – everything worth anything always take time, focus and passion.</p>
<p>Listen to this interview, give Chef Khalil and me your comments and let us all know what you gained from this interview. I hope you gain as much as I did…</p>
<p>If anyone would like to reach out to Chef Khalil &#8211; his web address is:</p>
<p><a href="http://www.cateringtoyourwhims.com/">http://www.CateringToYourWhims.com</a></p>
<p>Thanks to all my readers and especially, to Chef Khalil.</p>
<p>Any more questions?  Reach out via the contact page above and join my mailing list by adding your name and email in the box to the right. I&#8217;ll also send you some valuable downloads to help&#8230;</p>
<p>Andrew</p>
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			<itunes:keywords>Business,catering,chef khalil,Full-time,Goal,Health,How To,Podcast,Small business,Starting a business,Startup,tips</itunes:keywords>
		<itunes:subtitle>Tips for Bootstapping A Catering Company - (MP3 Download Below) - Today&#039;s posting is an inspirational podcast.  If you have an interest in starting a catering business then you must listen to this interview. - </itunes:subtitle>
		<itunes:summary>Tips for Bootstapping A Catering Company

(MP3 Download Below)

Today&#039;s posting is an inspirational podcast.  If you have an interest in starting a catering business then you must listen to this interview.

There are some critical elements in today&#039;s interview with Chef Khalil that I&#039;d like to call out...

Chef Khalil has leveraged his passion to not only start a business with different revenue streams but he&#039;s also using his passion and common sense approach to growing a business which is making a difference to kids and other people.

There are many elements to take out of this interview but the one&#039;s which I gained are:

	Constantly learning - taking courses, signing up to news letters in your space, keeping up to speed on your area, never resting on the accomplishments you’ve had but be constantly growing and striving
	Finding mentors who can teach you – even if it means working for free
	Steady growth - don&#039;t assume instant success, test the waters, plan and don&#039;t over-extend yourself either financially or emotionally – keep a balance in your life
	Sacrifice - Chef Khalil re-invested his profit into his business while managing his startup and a full time job – he knew what he wanted to achieve and was focused on achieving it
	Partnering - Its common for companies to leverage affiliates and partnerships online  but Chef Khalil is using this approach for his culinary business - its always possible to leverage partners and your community for any business
	Vision - know where you are going,  why you&#039;re going to get there then figure out the how and do it

So - I highly recommend that you listen to this brief interview with Chef Khalil - its inspiring because he is using his passion to help others but his common sense approach to business should be a course taught in every business school throughout the country – especially in this time of economic challenge. The key thought I took out is – if you want to be your own boss, you can achieve your goal if you have a passion, a commitment and are prepared to sacrifice to achieve it – even if it takes time – because, everything worth anything ‘always’ takes time…it doesn’t matter if we’re talking business, personal life or a good bottle of wine – everything worth anything always take time, focus and passion.

Listen to this interview, give Chef Khalil and me your comments and let us all know what you gained from this interview. I hope you gain as much as I did…

If anyone would like to reach out to Chef Khalil - his web address is:

http://www.CateringToYourWhims.com

Thanks to all my readers and especially, to Chef Khalil.

Any more questions?  Reach out via the contact page above and join my mailing list by adding your name and email in the box to the right. I&#039;ll also send you some valuable downloads to help...

Andrew
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		<itunes:author>Andrew</itunes:author>
		<itunes:explicit>clean</itunes:explicit>
		<itunes:duration>30:40</itunes:duration>
	</item>
		<item>
		<title>How do I write an Executive Summary?</title>
		<link>http://www.thefundingguru.com/how-do-i-write-an-executive-summary.html/</link>
		<comments>http://www.thefundingguru.com/how-do-i-write-an-executive-summary.html/#comments</comments>
		<pubDate>Fri, 22 Jan 2010 20:17:22 +0000</pubDate>
		<dc:creator>Andrew</dc:creator>
				<category><![CDATA[Angel Garage]]></category>
		<category><![CDATA[How To]]></category>
		<category><![CDATA[Raising Money]]></category>
		<category><![CDATA[angel investor]]></category>
		<category><![CDATA[angel investors]]></category>
		<category><![CDATA[Business]]></category>
		<category><![CDATA[Business model]]></category>
		<category><![CDATA[Business plan]]></category>
		<category><![CDATA[executive summary]]></category>
		<category><![CDATA[Financial services]]></category>
		<category><![CDATA[Madonna]]></category>
		<category><![CDATA[Microsoft]]></category>
		<category><![CDATA[Small business]]></category>
		<category><![CDATA[venture capital]]></category>

		<guid isPermaLink="false">http://www.thefundingguru.com/?p=563</guid>
		<description><![CDATA["What do I need to do to raise money for this business? I haven't got much in the way of a track record yet but I've managed to get a prototype and some commitments from would-be customers..."
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			<content:encoded><![CDATA[ <div id="attachment_568" class="wp-caption alignnone" style="width: 219px"><p class="wp-caption-text">How to write an executive summary</p></div>  This has got to be in the top ten questions I get asked by those entrepreneurs who are kicking off their first serious and committed attempt to raise money.  I know when I first went through this process, I went out and asked [...]<p>Related posts:<ol>
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		<title>Simple Secret to Achieving Your Lifetime&#8217;s Dreams &amp; Desires</title>
		<link>http://www.thefundingguru.com/simple-secret-to-achieving-your-lifetimes-dreams-desires.html/</link>
		<comments>http://www.thefundingguru.com/simple-secret-to-achieving-your-lifetimes-dreams-desires.html/#comments</comments>
		<pubDate>Tue, 19 Jan 2010 22:25:01 +0000</pubDate>
		<dc:creator>Andrew</dc:creator>
				<category><![CDATA[How To]]></category>
		<category><![CDATA[Offering Help]]></category>
		<category><![CDATA[Raising Money]]></category>
		<category><![CDATA[dreams]]></category>
		<category><![CDATA[goals]]></category>
		<category><![CDATA[secret]]></category>

		<guid isPermaLink="false">http://www.thefundingguru.com/?p=552</guid>
		<description><![CDATA[This is perhaps the weirdest post I&#8217;ve posted&#8230;all I can say is I was flying home from California having spent time with some friends and my brain just went in a &#8216;different&#8217; direction &#8211; no idea why &#8211; something in the airline&#8217;s shrink wrapped brownie perhaps? I&#8217;d welcome your thoughts and comments at the end! [...]
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			<content:encoded><![CDATA[<div class="mceTemp">
<div id="attachment_553" class="wp-caption alignnone" style="width: 410px"><a href="http://www.thefundingguru.com/wp-content/uploads/2010/01/Make_A-Decision.jpg"><img class="size-full wp-image-553" title="The Secret to Achieving Your Dreams" src="http://www.thefundingguru.com/wp-content/uploads/2010/01/Make_A-Decision.jpg" alt="The Secret to Achieving Your Dreams" width="400" height="400" /></a><p class="wp-caption-text">The Secret to Achieving Your Dreams</p></div>
</div>
<p>This is perhaps the weirdest post I&#8217;ve posted&#8230;all I can say is I was flying home from California having spent time with some friends and my brain just went in a &#8216;different&#8217; direction &#8211; no idea why &#8211; something in the airline&#8217;s shrink wrapped brownie perhaps?</p>
<p>I&#8217;d welcome your thoughts and comments at the end!</p>
<p>++</p>
<h2>The Simple Secret for Achieving All Your Lifetime’s Dreams and Desires</h2>
<p>Have you ever had an ‘Ah-ha’ moment in your life? A split second when all the different pieces that had been floating around almost ignored in your mind, suddenly and irrevocably ‘click’ into place with a burst of bright shiny realization? A moment when darkness, a darkness you didn’t even know existed, falls from your eyes and in that moment of realization it&#8230;all&#8230;makes&#8230;sense?</p>
<p>If you are one of the lucky ones, the paragraph above is making you nod your head, you are remembering just such a moment and, without knowing quite why, you are smiling.  Yes, smiling…lucky you.</p>
<p>Or, maybe, when you read that first paragraph it seemed familiar, but hauntingly so…hints of those moments which had almost been yours but had always just been a little out of reach. Close but not quite close enough, tantalizing you.</p>
<p>We’ll I want to share with you my simple ‘Ah-ha’ moment.  I call it simple because it really is – the secret of achieving all your dreams is so simple that it has paraded itself in front of you many many times. So many times that you don’t even see it for what it is&#8230; ‘<em>the Simple Secret for achieving all your lifetimes dreams and desires.”</em></p>
<p>But and doesn’t there always seem to be a ‘but’ – just because it’s a simple secret doesn’t mean its easy to accomplish. I can’t guarantee that just know this simple secret you will actually achieve all your lifetimes desires. Like all things in your life, that is in your hands not mine or anyone else’s.</p>
<p>So – do you want to know what this simple secret is? The one that has been right in front of you all this time? And the only way you will achieving all of your lifetime’s desires?</p>
<p>I almost hesitate from putting it down on paper (or on screen anyway…) because I know there are people who will read this and discount it – even though it is perhaps the most important thing they will ever read….</p>
<p>Are you ready?</p>
<p>…I’m swallowing over here as I write this, a little afraid that it will get missed, a thunderclap in the wilderness where no one can hear it shake the earth….</p>
<p>The simple secret for achieving all your lifetime’s dreams and desires is….</p>
<p><em>to decide</em>….</p>
<p>Yes, the secret to achieving your lifetime&#8217;s dreams and desires is YOU have to decide that you WILL achieve them.  You can’t achieve them by wanting them, by desiring them, by thinking about achieving them, preparing to achieve them, learning to achieve them, waiting to achieve them soon or later…no&#8230;</p>
<p><strong><em>&#8230;to achieve your lifetime’s dreams and desires, you have to decide that you will achieve them.</em></strong> And you have to decide every day, constantly, with every fiber and with every act you take – when you next meet a person who has not achieved what they wanted in life, ask them why not?</p>
<p>And I would bet you a <strong>comment on this post</strong> (which I’d like you to write by the way&#8230;), that they’ll tell you a thousand different stories why they did not manage to achieve their lifetime’s dreams and desires – but when you sift through the words, the excuses and the dried up husks of hope – the one common thread running through their words, excuses and alibis for why they failed to achieve their lifetime’s dreams and desires was because they didn’t <em>truly</em> decide that they were going to achieve them. They let other things get in the way of making that definitive and resolute decision and before they knew it, life had happened and the time had passed.  Now you know what’s interesting? They may still have had an amazing life…life is funny like that but still&#8230;</p>
<p>So, is it a bet? Will you leave a comment on this blog as, if you really think about it, I may have won this wager?</p>
<p>If you want to achieve your lifetime’s dreams and desires – make the decision that you will, then make it every day just as you are falling asleep and every morning as you wake, as you open your eyes and look up at the ceiling and consider what this day will bring and having really, truly made the decision (which, after all is simple right)…follow through and do it. Believe it or not, making the decision was the hardest part! And I will not guarantee it, but I am certain that when you do, opportunities in your life will appear and perhaps for the first time, you will have the eyes and the right frame of mind to see them all. Life likes people who decide what they want from it – Make the decision for your own life or life will make the decisions for you.</p>
<p>Which would you prefer?</p>
<p>All you have to do is decide.</p>
<p>I appreciate all your comments.</p>
<p>Andrew</p>
<p>Ps: Any more questions?  Reach out via the contact page above and join my mailing list by adding your name and email in the box to the right. I&#8217;ll also send you some valuable downloads to help&#8230;</p>
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