This area of investment is the "pre–IPO," characterized by private placement transactions primarily equity in nature. Entrepreneurs must understand the problem, face the challenge, and possess the skills necessary to address the problem. Because their resources, time, and training are limited, entrepreneurs must understand the private placement, a unique process that demands a capitalization strategy.
Most importantly, entrepreneurs must embrace the investor perspective. In this one–of–a–kind book, Angel Financing provides a strategy that works. Hundreds of people have used the principles detailed in this book to raise millions of dollars.
The value of the angel investor, after all, can no longer be denied: Angel capital is the primary source of capital for early–stage deals. This fact alone accounts for the plethora of matching networks, seminars, and venture forums on the subject. Although the huge contribution of the angel capital market in creating jobs, expanding the tax base, and increasing our global competitiveness through technological innovation is well known, little is understood about the angel equity market and how deals really get done.
Moreover, over the last ten years, the authors have built the largest angel database in North America and interviewed thousands of investors about the nature of the pre–IPO investment process. Through their proprietary research and their comprehensive development of a typology of investors, the reader will not only be better positioned to identify and qualify investors, but will also be better sensitized to prepare the documents and the sales strategy to close their deals.
In Angel Financing, the angel investors tell their stories in their own words. The reader learns in depth about the forces that create this investment opportunity in high–risk investing. The reader journeys through the investors? hedging strategies, risk assessments, syndication orientation, financial return expectations, deal structuring preferences, monitoring investments, harvesting returns, and realistic exit strategies.
What?s more, many investors themselves do not understand the valuation process involved in "blue sky" deals where there are no historical financials available. The valuation process is an art form in early–stage investing and for the first time it is candidly reviewed.
Even more important is the due diligence process. Angel Financing answers the most basic questions that sometimes even investors are too embarrassed to ask. So for straight talk on how to make money in this market, get the insights of the successful investors who have made millions.
In the United States, two million investors possess the discretionary net worth necessary to invest in pre–IPO private placements. Why is it that only 250,000 to 300,000 are active each year? The reason is that these investors while interested do not understand the process, do not understand how to find the deal, do not know how to determine which deal justifies their efforts, and do not know how to develop a hedging strategy.
Whether you are a dreamer, dream maker, or providing services to either, Angel Financing is the ultimate practical reference guide to add to your professional business development library.
Get the money your start–up business needs
"Finally, two experienced fundraising advisors demystify the process for entrepreneurs and individual investors. This should be required reading for ALL start–up companies because an outside capital investment is paramount to their existence."
Lori King CEO and Founder NVST.COM, Inc.
"Angel Financing presents an innovative capitalization strategy that works. Based on extensive academic research and filled with practical advice, it is an invaluable resource for all participants in the early–stage capital formation process."
E. Jeffrey Lyons Managing Director Marquette Consulting Group, Inc.
"I think Angel Financing must be read by all those looking to raise capital. It is also a great resource for those angel investors with little experience but the desire to get involved with early– stage companies."
George A. Mathews President Southwest Capital Resources, Inc.
"Angel Financing is the most comprehensive guide for private investments that I have seen. A must–read for angels and entrepreneurs!"
Jerry E. White Business Founder, Owner, and Chairman/CEO ICR Licensee
The Private Placement Investment.
A Strategy That Works.
THE ANGEL INVESTOR.
Alternative Sources of Capital.
What Do Private Investors Look For in a Deal?
Types of Private Investors.
The Newest Breed of Angel: The Manager–Investor.
RESOURCES: FINDING ANGEL INVESTORS.
Alternative Funding Resources in Accessing Angel Capital.
Building Your Own Database of Angel Investors.
The Role of the Placement Agent in Raising Capital: A Marketing Partner for Your Deal.
THE INVESTOR PERSPECTIVE.
The Venture Process.
The Valuation Process in Private Transactions.
On–line Options: Entrepreneurs, Investors, and Web–Sites.
Gerald A. Benjamin (Sausalito, CA) is a Senior Managing Partner of International Capital Resources (ICR), an investment banking, corporate finance, and capital sourcing firm. He is also publisher of the California Investment Review.
Joel Margulis (Mill Valley, CA) is a freelance writer who has published books and articles on a range of business and finance topics.