Wanted - New Angels
Bill Warner Saturday, February 14, 2009
Yes, in the face of this perfect economic storm, private individuals should consider making investments in start-up companies. You probably remember the old adage of “buy low, sell high.” Well, we are definitely at a low when it comes to valuations of early stage companies, while at the same time more in need of successful entrepreneurial companies than ever before. Small but impactful businesses are the life blood of our economy.
How to become an angel
To become an angel investor, you have to have done good deeds but you don’t have to die and grow wings. Your deeds have to have put you in a position of being an accredited investor according to SEC guidelines. If your net worth is over $1 million, you are probably accredited.
But, that is not enough. If you have never done this before, you should learn the ropes from experienced investors. Believe it or not, even Silicon Valley is struggling with this issue. See this article in TechCrunch about how they are educating new angels.
One of the best ways to do this is to join an investor organization in your area. Get involved in the process of evaluating companies and performing due diligence. Join in the selection process and learn from people who have done it before. Go to the Angel Capital Association website’s directory to find one in your area, including the one in Research Triangle Park called the Triangle Accredited Capital Forum.
Read about angel investing from such books as Cutting-Edge Practices in American Angel Investing, edited by John May and Elizabeth O’Halloran, Fool’s Gold by Scott Shane, and How To Be an Angel Investor by David Arnis and Howard Stevenson, or just Google on “angel investing” to find a wide range of resources on the subject.
Meet entrepreneurs
Take the opportunity to meet entrepreneurs in your area by going to networking events put on by such organizations as LocalTechWire, The Council for Entrepreneurial Development and many other organizations in your area.
Take the time to ask them about how they have started their companies. Learn about their financing needs and how they use investor money. Discover their perspective of angel investors and how they help get companies launched. Get a perspective of how angel money complements the many other sources of financing available from grants and loans.
Meet an angel
Take the time to meet some angel investors and simply ask them what it’s all about over a cup of coffee or lunch. You will learn about a world of very dedicated people who believe in capitalism and are not only investing for the right reasons but also are giving back to their communities some of the wisdom and knowledge they have gained over years and years of business experience.
Filed Under: Angel Investment, Financing a Company
Bill Warner is the Managing Partner of Paladin and Associates, a business consulting firm in the Research Triangle Park area of central North Carolina, and is the Chairman of the Triangle Accredited Capital Forum, an angel investor network with over one hundred members throughout the southeast.
Bill Warner is the Managing Partner of Paladin and Associates, a business consulting firm in the Research Triangle Park area of central North Carolina, and is the Chairman of the Triangle Accredited Capital Forum, an angel investor network with over one hundred members throughout the southeast.
