Within a few days of posting on http://www.fundingpost.com, one of the many websites created for entrepreneurs publishes a resume designed to attract the attention of potential investors, an email request from the AngloAmerican Investment Group and one Anthony Oppenheim. Mr. Oppenheim explained in his letter that from his office in Peachtree-Saint-Atlanta, he is a consortium of private investors and mostly European family trusts who specifically sought investments in such globally oriented enterprises as ours. They do not charge for viewing business plans. They represent decision makers and can write checks on the right investments, etc. Please call him to discuss this venture.
Wow Can we be happy? Despite the fact that the letter was sent from the address of Comcast.net, for large investors there is an unheard of use of common e-mail addresses. It contained phone numbers and address information that corresponded to the Atlanta area, and, of course, a huge conglomerate, such as the Anglo American Investment Group, quickly attacked any scam artists who were brazen enough to openly use their brand. We were delighted.
The phone call to Mr. Oppenheim gave a strong reason to believe that they were real. Professional behavior, the right questions and answers to any questions that we had. They invest in people as much as projects. We will invite you to Atlanta to meet with him and his colleague Al Dubin (“DUBIN, yes, this is the correct spelling,” the conversation passed when I took notes) and reviewed our business plan in detail. FedEx 10 copies of the business plan before the descent. Non-disclosure agreement was not a problem. If they like what they see and hear, we will quickly see a list of terms. He will not send information about hotels in Atlanta.
“Amazing,” said my son.
Then everything changed. The following letter reads like a bad mailing list. They reviewed our business plan (ridiculous ... we have not sent them yet) and were ready to invest the entire amount. They boasted about investments made in places like Shang Hai (interesting writing for Shanghai). A request from us for references or contacts with legitimate past investments, since our present due diligence caused dissatisfaction via e-mail, which asked us to provide more information than even the government knows about us. And, unfortunately, the name of Mr. Dubin suddenly transferred to Dublin.
Jig got up.
One glance at http://www.ripoffreport.com would save us some time, since these characters had been on him for a while, and, apparently, he must get entrepreneurs to desperately need funding to believe that Anglo American will be happy to finance them if an entrepreneur pays the travel expenses of one of his representatives to visit the site and create an offshore escrow account for safekeeping of funds until the completion of the transaction. Up to 40,000 dollars.
Entrepreneurs, like most creative people, are a strange fate (I can say that, being called a “serial” entrepreneur), and comparing them with their projects with them, the correct investors of Angel are often long, incredibly frustrating and expensive to process. Hundreds of ideas die on the vine because of the lack of life that gives cash flow. And anyone who considers this process easy had an idea that was too widespread, asked for too little investment, and probably abandoned too much capital.
The cost of raising capital to start any business from scratch is a daze. If you offer an offer of securities even in its most basic form, a good lawyer will be $ 200 per hour and higher. And your accounting firm will be better at the highest level. Want to post a memorandum? It is better to have a good home that you are willing to lay on the hilt or sell this new Lexus on your way that you paid in cash over the past year. Wait a minute. You have none of them? Have you spent every penny of extra money you had to develop at the stage of a business plan?
As my friends from the Great Lakes report, “You are a SOL”. The days of investing in just a concept have passed.
Today, it’s all about proven business models in the form of an existing business that produces some form of income somewhere. Friends and family financings are completed, and probably one or two large investors from your own wealthy network is a sweet spot for attracting early-stage investment Angel. And some sectors are naturally sweeter than others. Located next to the North Carolina research triangle park, a virtual incubator for biotechnology, life science, and high-tech business projects, trying to sell the local angels the idea of creating a new insurance company, no matter how sexy the plan, rarely even makes it in the evaluation process. Silicon Valley Angels look mostly for ideas in another sector that does not need to be described.
In fact, most groups of angels easily identify those business ideas that they are interested in and those who are not interested. Unfortunately, for me, my particular enterprise falls into the categories of both a startup and a very unusual business sector for angels investment. Add to this that we need funding in the amount of $ 3 million, and the combination scares most groups of angels, not to mention individual investors. Three million dollars are starting to infringe on the investment landscape of the institution, controlled by venture capitalists and investment bankers. Five million dollars is the limit for most proposals under rule D, without delving into the demands of investor complexity. Go to this arena and be ready to invest in the high five digits to start looking for more money, without any guarantees. Who are these entrepreneurs who have this in their back pocket? No one just started, that's for sure.
So, what are the alternatives when there are no wealthy uncles or neighbors who have just won the lottery and do not know where to put their money? I can only say from experience that finding one or two true believers who have a network of accredited clients or friends of your investor is your best choice. The six degrees of separation no longer apply thanks to the internet. I guarantee that you know someone who knows someone who knows a reasonable investor. The trick is to bring out the words without warning each potential rival, the idea of stealing a pirate brigade or a crook who will kill you and die. In truth, this is a high wired act.
There are literally hundreds of websites advertising groups of angels or supposedly acting as an information clearing house for angels to search for investments that interest them. You can quickly spend tens of thousands of dollars on filing fees or subscribers for individuals or groups who claim that you have a professional team that will “evaluate” or display your business plan before they allow you to access investors even online. In fact, many of these websites are just an acquaintance with someone who has exhausted your bank account, as they offer to go to the next stage or introduce you to “real” investors.
Even some fairly well-known groups of angels claim a qualified screening process, which is actually one person who, without your business plan, is that person is the same month, often even the best ideas do not reach real investors eyes. So ask a lot of questions before you pay any fees and understand exactly what you get for your money. Talk with entrepreneurs who claim to have funded and found out how their process really worked.
There are several directories of legitimate groups of angels and investment firms. The one that I found rather comprehensive is http://www.privateequity.com. And there are software applications that are available to allow you to make pieces and cubes that you view by scene, sector or geography, or any number of other demographic data.
Publishing any venture information on the Internet is risky if you are not familiar with securities laws. Ask a good securities attorney to review everything you publish to make sure that you are not crossing the line of sale of securities without a license. Do not tell people that they can expect an average of 90% annual return on investment, even if it’s true. Of course, without you, like orange overalls. Even seemingly innocuous language sometimes pushes the boundaries of information to advertising.
And then, of course, we will return to the interesting queries that you receive by posting information about your business on the Internet. From a Malaysian doctor who invites you to fly to Kuala Lumpur (at his own expense) to seal the deal without having as many conversations with you on the phone. Vernon Jones, who has $ 6 million given to him by a woman in Libya, who is now kept in the Bank of Ghana, but calls from a rented house with a phone number belonging to someone named Neomiya Green. Or a gentleman from Thailand, who was surprised to learn that I actually called a company in Australia, an email address that he used illegally, and still claimed that I tried him too quickly. I’m always surprised that these people think that their tags don’t know how to use Google.
Or that the Anglo-American handful, which by any other name still smells like fraud.
The sad part is that, apparently, the authorities do not have enough power to catch these lower levels, as we continue to receive emails from these scammers, despite calls and emails to various law enforcement agencies.
The bottom line is that this is actually money to make money, even if it is not your own. The economy is moving in the right direction for entrepreneurs of all kinds, but it understands the process and the cost of attracting external capital before you enter it. Find yourself a mentor than through the whole process. Ask a lot of questions and learn from your mistakes.
In the end, the wheel has already been invented.
