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Further
Reading ...
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Something "New" For Managers? - Robert A Kelly
A new public relations blueprint could be a good idea if you’re a business, non-profit or association manager who’s not getting the important external audience behaviors you need to achieve your department, division or subsidiary objectives. ...
Who is Really Making the Expired Domains Money? - Ed Zivkovic
What is an expired Domain Name? An expired Domain Name is a Domain Name which was previously registered but the owner did not re-register it. If a Domain Name expires, it becomes available for anyone to register. Why are Expired Domains so Popular?...
The Unsung Heroes Of Internet Marketing. - Tim Spencer
One of the reasons that people fail to earn anything close to a living on the Internet is that they fail to take the time to learn how to do it! This may sound crazy, but it's true. People want results yesterday, not tomorrow, not a few months...
It's not to Late To Get a Great Mortgage Rate - John DiDomenico Home Mortgage Pro
Despite recent increases mortgage rates are still very competitive. Weather you’re considering to refinance or to purchase a home it is still possible to get loans still in the upper 5% range. Rates like this are still making it possible for people...
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Angels, Are They Real?
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Written By:
William Cate
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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 - continued below ...
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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.
To contact the author: Visit the Beowulf Investments website: [http://home.earthlink.net/~beowulfinvestments/] Or, visit the Global Village Investment Club Website: [http://home.earthlink.net/~beowulfinvestments/globalvillageinvestmentclubwelcome/]
Published February 2000
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/]
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| _Additional Resources ... |
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Personal Discipline and the Home-Based Business Owner - Elena Fawkner
Personal Discipline and the Home-Based Business Owner © 2002 Elena Fawkner Allow me to let you in on a little secret you're probably already wise to anyway. As often as not, the inspiration for article topics comes from struggles with my own...
A Pyramid By Any Other Name Will Still Come Tumbling Down - Elena Fawkner
"Three Days, Three People, Retire in 30 days! Make no mistake, People will start BEGGING you to sponsor them in! Take a look at this Income Projection Chart: Level | # of Days | # Benefactored | Income Projection 1 3 3 $70 2 6 9 $130 3 9 27...
How to Deal With Salespeople - Steve Kaye
If you are an executive, you may sometimes feel like a open jelly sandwich at a picnic. Every crazy critter in the world wants to bite into your budget. Here's how to protect your time and preserve your sanity. Ask questions Many salespeople work...
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