I saw several references to arrested spy suspect Anna Chapman as being a blogger, and she also joined a professional blogger's group on her Facebook account called the School of Academic and Professional Blogging -- whose founder and director, Edgar Cross, quickly de-friended her after her arrest, as I discovered, finding him in the Google cache, too, from her now-closed FB account. Anyone can join the School fan page which has more than a 1,000 members. The School is located in Armenia.
The New York Entrepreneur Week which seems to be the only place where her "professional blogger" has actually appeared, also cut her blog, but thanks to the wonders of Google cache, here it is, with some fun comments too -- she/they could use an editor:
Angel Investment: What Entrepreneurs Need to Know
For any entrepreneur, young or old, there a million important things involved in launching and developing a successful business or product. Above all you must have passion, and the willingness and determination to see your genuine idea reach a stage of fruition. On the more logistical end, money is another primary and vital factor in the development of any burgeoning business or services venture.
Traditionally, there are three recognized sources of funding for seed stage / start-up ventures, these are: angel investors, venture capitalists, and commercial banks. Amongst these three, angel investors most commonly invest in early-stage ventures, providing a financial base with a high-risk cost to themselves.
Angels, individuals of some considerable means, are people committed to seeing young businesses flourish. Angels accept the early risk; they have the financial assets to withstand losing their investment, and tend to act in an advisory role to the entrepreneur or business founder – offering invaluable experience, advice, and contact information.
In this study, we will examine the roles of angel investors, compare angel investors to venture capitalists, and create an overview of early-stage funding for entrepreneurial enterprises.
Angel investors got their name, because their investments, originating in Broadway musicals, seemed like money from the sky. Angels are individuals who meet the definition of an accredited investor. The key here is that angels are individuals – angels use their own personal wealth to invest in various enterprises. Above all, angels wish to see a lucrative return on their investments, especially considering the high-risk they undertake by investing at such an early period – for angels, a strong exit opportunity is extremely important as a means of realizing gains on their investment.
In terms of seed stage / start-up ventures, angels tend to be the best early investors because they provide more modest financing than venture capitalists. Venture capitalists, who invest third-party money, and therefore cannot be patient in terms of return rates on investments, generally only invest in later- or mature-stage enterprises. However, when venture capitalists do choose to invest in early-stage / start-up ventures, the sums that they generally offer are far greater than required by the young enterprise. These sums constitute a majority percentage ownership of the company; therefore, the entrepreneurs and management teams of these young companies loose control over their own ideas. Angels choose to invest modest sums over a diversified number of ventures, thereby augmenting their individual portfolios and lessening the severity of any potential loss.
As an entrepreneur you must be aware the angels will not blindly invest in any idea or business scheme. It is important to have a an extremely well-written business plan that includes stringent financial projections, that you are prepared for due diligence processes to be performed, that you have your own money invested in the enterprise, your corporate structure is clear and does not include multiple layers of ownership, and that you are constantly generating new ideas and bringing them along to the prototype stage. Furthermore, angel investors and venture capitalists alike are not interested in enterprises with limited growth, or without a strong market focus and potential. Angels and venture capitalists like to invest in enterprises that are seeking to grow and have a strong path to marketability.
Foundationally, angel investors were most likely young entrepreneurs at some point themselves. Angels wish to invest in industries that they know, and industries that are near to their respective communities. Angels enjoy seeing growth in the field in which they developed success; therefore, angels will invest in these same industries, bringing entrepreneurs, besides funding, experience, industry knowledge, and valuable connections.
Angel investors are renowned for their patience when funding a seed stage / start-up venture. Angels tend to allow for a three to seven year period, during which time the company’s products, market, and management all reach stages of maturity and are nearing the point of being acquisition-ready. In addition to the first round of funding, angels have begun to retain their investments for future rounds of financing. For angel investors, the primary exit strategy is through merger or acquisition – providing the investors with cash or liquid stock.
The angels, who despite their patience and willingness to help the young company flourish do have reasonable expectation of return on their investment, generally do not accept common stock, opting for preferred stock – traditionally held for venture capitalists. Angels are professional investors, and as an entrepreneur you must be respectful of their experience and their knowledge – doing so, only adds value to your burgeoning company. Though the risk is high, angel investors are generally willing to support young businesses, not only for the lucrative returns, but also for the love of business and the growth of enterprise.
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About the Blogger:
Anna is a founder of NYCrentals.com, a real estate search engine for rentals in Manhattan. She also owns a vertical search engine in Russia, Poland and South Africa. Prior Anna was took Bio tech companies to IPO in Frankfurt, worked in Barclays Bank in London and sold private jets. She loves launching new start-ups and sharing experiences with other entrepreneurs worldwide.
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2 Responses to “Angel Investment: What Entrepreneurs Need to Know”
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A very interesting article.
Thank you.
Cool !!!!!!!!!!!!!
Thanks,
Jg