| |
| |
|
|
|
|
|
|
Angels, Are They Real?
They're real, but few survive. High risk investing is dangerous to your bank balance. The process toward extinction is that an angel risks money in one venture. It fails. Then, he joins a group of angels and risks money in another venture. It fails. At this point, the angel usually hands in his or her wings. To be an angel, you must have considerable discretionary income. This is why most angels are attorneys, accountants, medical doctors or successful small business people. Attorneys and accountants often form angel groups from their client base. Their goal is to take the ride on the roller coaster without paying for the ticket. Their clients invest in the project and they get a piece of the action. Since the action is usually bad, all they get from the effort is a reduced client base. Angels want to invest within fifty miles of their location. This allows them to visit the office or plant of the investment on a regular basis. As the company starts to fail, the proximity card encourages the angel to try to take over the business investment. This mistake is often made by successful small business people. I'd defer to a study on the odds of attracting an angel to your company. However, my experience suggests that an angel will invest in about one company out of every three hundred that send the angel their business plan. My experience is based upon working with San Francisco Bay Area Venture Capital Clubs over a decade ago. Given the greater investment interest today, your odds may be better than 1-in-300. Eighty-five percent of small businesses fail. Among the 15% that succeed are franchises and professional offices. My guess is that an angel has about one chance in ten of making money on a risk capital investment. The angels think they can beat the odds. They're wrong. Most attorneys, accountants and medical doctors achieve their social position and income by believing what they read. As a student, if you question the data in a textbook, you are unlikely to pass the final exam. This pattern of read and believe gets the student from first grade to medical school or law school. Believing what you read in a business plan is often a mistake. Professionals tend to believe the written word. Doing so as the basis of a risk capital investment is fatal. As more than one professional has told me when they turned in their wings, "I guess I'll have to raise my fees to offset my business loss." I've often wondered if barring professionals as angels wouldn't lower legal and medical costs. Small business owners believe they are "smarter than the average bear." It's their ego that often clouds their judgment. If you don't believe that you've made a mistake, you'll dump more money into a black hole investment. It's this group that are most likely to turn in their wings as they file for Chapter 11. "There's a time to hold them and a time to fold them." Successful small business people don't believe in folding. There are always angels coming into the Market. We live in boom times. The population of angels is growing. If you can catch a nearby angel, do it. It's best to catch them before they see the financial fire that awaits most of them. As with buying lottery tickets, there are a few successful angels. I'd like to see a study of how long they last, if they beat the investment odds. Published February 2000 About The Author William Cate has been the Managing Director of Beowulf Investments [http://home.earthlink.net/~beowulfinvestments/] since 1981 and is the Executive Director of the Global Village Investment Club [http://home.earthlink.net/~beowulfinvestments/globalvillageinvestmentclubwelcome/]
MORE RESOURCES:
Investing - Google News |
|
|
|
RELATED ARTICLES
Powerful Options Basics Lessons Improving your trading in 180 days. An option is a traded security that is a derivative product.By derivative product we mean that it is a product whose value is based upon or derived from the price of something else. The High Price of Oil In less than four years, the price of oil has risen about 300%, or over $50 a barrel. The Light Crude Continuous Contract (of oil futures) hit an all-time high at $67. How to Buy to Let Find out everything you need to know about buy to let. Learn what to buy, where to buy and what not to buy. Invest or be Pink Slipped Firing an employee seems to be easier and easier for corporations. Up until now you allowed them to set your clocks. Use of a Franchise Business as a Family Tax Planning Strategy Suggesting the use of a franchise business as a vehicle for family estate and tax planning. Specifically using as an example, The Car Wash Guys, a portable car wash franchise, where you will be purchasing a completely designed and outfitted car wash truck and the right to develop a specific city or regional area with out of pocket start-up costs between $25-50,000. June 2005: Weather Forecasts for Weather Traders If Johannes Kepler, the renowned 17th century astronomer and discoverer of the planetary laws of motion, could speak from the heavenlies, he might have a few words of wisdom to share with the National Weather Service. Although Kepler's name is not normally associated with meteorology, he was quite the weather forecaster in his day. Is a SEP Plan Right For Your Business A SEP is a special type of IRA. Under a SEP plan the employer creates an IRA account for each eligible employee, hence the name SEP-IRA. Success Trading: More Basic Terminology for New Traders One important aspect of trading the markets is to understand how to feel it's overall pulse. In the stock market, this is measured by measuring the movements of selected stocks across various sectors to let us know how the market is doing in general. Why have Investment Plans for the Stock Market If you do not have an investment plan in the stock market you are subject to impulses, urges, hunches, premonitions, strong feelings, greed, panic, fear, indecision, and just plain foolishness. In my opinion, without a plan, without that clear conception of a total stock market investment strategy, the chances of successful investing in the stock market are pretty slim. Profitability And Stock Turn Rate The inventory of the typical store represents the largest single element of its total assets. The sale of goods from this inventory is the merchant's chief source of operating profit. How to Choose the Right Share Class You'll want to opt for the no-load or institutional share class instead. If you're a no-load investor who is determined to buy a fund that's primarily broker-sold, go through a supermarket and opt for the D shares. Bearish or Bullish? If you are interested in stock investing and the stock market, you may have plenty of questions. Even if you have already started investing, you may still have many questions about the details of the stock market and your options. Asset Location - Increase Investing Returns & Reduce Your Taxes Location - Once the holy grail only for real estate investors is fast becoming the mantra for every stock, bond, and mutual fund investor. Experts and studies now recognize managing asset location is second only to asset allocation in determining the success of your investment returns. Press Release Scams and Successes: Reading Between the Lines Press releases are a means through which companies can keep the public up to date regarding their recent affairs. It is the duty of every public company to keep its investors and indirectly potential investors aware of what is going on in the company. Introduction To FOREX The Foreign Exchange Market, better known as FOREX, is a worldwide market for buying and selling currencies. It handles a huge volume of transactions 24 hours a day, 5 days a week. Waiting 20 Years Can Cost You Millions - Dont Wait Start Today Many Young people live for Today. They really don't fully understand the power of compound interest. Angels Investors and Their Networks What is an Angel Investor? An Angel is usually a private person who invests in small businesses. The Angel is generally a successful businessperson or entrepreneur who looks to invest in a business that has potential for growing their investment in the future. Rolling your 401k: Contributory IRA vs. Rollover IRA In an ideal world you would start your working career with a great company in your early 20s, steadily climb the corporate ladder, retire at age 65, and draw a sufficient income from your accumulated 401k account to live happily ever after.Unfortunately, that's not how the real world works. Straddle Strategies in Option Trading The straddle strategy is an option strategy that's based on buying both a call and put of a stock. Note that there are various forms of straddles, but we will only be covering the basic straddle strategy. The Switzerland of Asia Shines In many respects, Singapore is the Switzerland of Asia.Begun in 1819 as a British trading colony, the Republic of Singapore was founded in 1965 under the leadership of the current Prime Minister's father, Mr.
|
| home | site map |
| © BullMarketData.com 2008 |
