Mar 12

The work of Angel investors increases – private placement continues to grow

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A positive data show that the bottom has been reached, that Pro is the University of New Hampshire Center for Venture Research in mid-2009, Angel investment data have begun to rise. During the first half of 2009, the angel investors to fund 24,500 new businesses, more than 6% over the same period in 2008.

The figures show that 2009 will be shown at birth of around 50,000 enterprises, all from investors and venture unfunded> Capital firms. In a November 12 article in Business Week's Spencer Ante has reported that the business angel continues to increase and there are still some great ideas. "It may be that this series is the best time to make a company," said Carl Schramm, president of the Kauffman Foundation, an organization that promotes entrepreneurship.

There are several reasons. Initial cost is low. Office, labor and material costs are cheaper and entrepreneurs who are on duty weather these storms. Thisseparates the composer "of the true visionaries. People weather difficult times, how to start these new companies and their (and investors) dreams into reality.

Another reason is that competitors, incumbents get to the inside, as they fight the daily struggles of the market tend tough. This is the start-ups to gain critical market share soon.

This is fertile ground for private investors, angel investing in these companies can do. ThisEntrepreneurs see a real market needs. Who can see a real need and fill is the secret to a successful company and the exciting return on investment.

If the stock market doubled in 5 years that has a growth rate of 15% of investments. New Angels Venture typically see returns of 20-40% and some bigger, much bigger. What makes the world of private investment, with a worthy addition PPM portfolio and an important tool to reach a loss last year. SureLook for those that Security Exchange Commission (SEC), consistent with the rules.

This table was made by Gary Beach, publisher emeritus of CIO magazine. The table, which points to the Fortune 500, what is the percentage of firms in the top were taken during a recession.

Based on the Fortune 500 —

Percentage that were added to the economy in a recession year

Top 10 Companies

70%

Top 25 holdings

64%

Top 50 holdings

52%

Top 100Company

43%

Top 500 Companies

36%

Percentage of years that the United States was in recession: 39%

Date: Gary Beach, Fortune, NBER, Wikipedia

From these data, the United States into a recession for 39% of years. Among the top 10 of the Fortune 500, started 70% in periods of recession. This means that almost 40% are currently the United States had slow economic times, yet we continue to grow.

Giants are still in difficult times. Based on American history,recessions are not new.

Most angel investment of $ 10,000 to $ 1 million. This is a game for portfolio investment, in order to spread your bets. Not all are winners. In general, 24% end in failure, but the winners more than offset the stragglers. This is the power of a diversified portfolio. When you search for companies with a sound financing of this innovation, offers the possibility to compensate for past losses and generate personal emotions.

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Mar 12

Seed money for a new design is easier to obtain than you think

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Suppose you work in a sector and the entire time he worked in your job you have always wondered why some particular problem has always been there, and nobody was the gap that maintenance is required. They examine and identify, as what the market would pay to fix this problem and find a couple of quick search on how big the market and the number of potential customers for the solution to this problem. At first conservative 5%To reach the market and is worth 1.5 billion dollars a year. Now that is really a nice niche!

Multiplying the estimated cost of the product that you created from the set of all possible customers of the nation and a conservative estimate of 5% that your start-ups that have a lot of you in hock so calculated to attract that this is a valid business opportunities.

The next step would be to establish a course of feasibility studies, which is well documented and notpresented in printed form. Next you will get market statistics and data to support the incredible show that the market for this new product or service is actually located on a …. annual staggering 18% over the last five years!

Appreciate achieve additional calculations to predict future returns on your conservative 5% of the market and made it difficult to forecast profit of 5 years in the future on the past 5 years, a growth that is based generally an acceptable parameters.

The timeYou have completed to determine the costs of creation and access to only that small 5% conservative estimate, and as you pour over the information collected, you will see that there is an annual profit of 704 million U.S. dollars for the company. You were a bit 'emotions? I'm sure that after all that logic and clear, yes. If you could do what comes from the creditor highest in the world, the financial resources for … and would not even go back and think!

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Mar 12

Web Marketing Strategies Venture Capital

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When it comes to fundraising, it is the best resource on the Internet, you can not only find an enormous amount of information at global private equity and venture capital fund profiles – you can also press releases and articles to your advantage.

When it comes to raising capital and a lot of assessments – the point of exit handful of venture capital funds is always going on the Internet, which will put on your site and an extensive research on the WebYour business and industry.

A good web marketing strategy will be released in large amounts of items or use it for your company, and that is showing a great number of venture capitalists, who have a good marketing strategy in place.

If the providers of risk capital are unable to find any information about your company, your company is probably because of insufficient information on the Internet – skipwhich will not be able to provide information to perform even basic due diligence to.

For this reason, do not underestimate the importance of web marketing and the importance of press releases.

What can you do to impress Venture Capital Funds

or Client Profiles – This is the best way to impress venture capital – you show existing customers, it shows you have client testimonials. If you have customers include in diversified industries, andVenture capital funds shows that customers have diversified.

O Multilingual Website – This is about having an international perspective, venture capital funds more globally oriented have enough people who have experienced not only a company interested in a national market share. Popular Chinese, Spanish and German – the 2nd fastest growing community in the world.
Many press O – press releases regular, better if you canthey have in different languages. If the venture capital fund, see the press releases about your company to find independent, that will always be enthusiastic.

Or everyday language – large common mistake is the technical jargon, which have always supported people to tears, you can use to imagine that the venture capital fund an opportunity to review 5-10 days, you have less than 30 minutes to impress, skip the jargon and Save for the following discussions.

O Know your competitors – NoQuestion 1 of venture capital funds is always asking who are your competitors and how are they going? If you are in an area that all your competitors are doing wrong, why should you be different? Highlight how your company stands out from the competition. Show them to issue or company profiles of your competitors, which are always taken from the Internet, show them who carried out market research.

or blogs – you can use blogs, corporate blogs, whichpress releases for your office or just ideas and development of businesses – venture capital firms have been looking for this very useful, and this may also help in the form of web marketing.

There are other Web marketing techniques that should be explored in order to get investors in venture capital – join several groups of private equity and venture capital firms and forums such as Facebook and LinkedIn as well as groups for your industry.

This is a greatuseful technique and, therefore, many companies have created networks and relevant commercial connections with others – that we have for many years and we have forged thousands of business contacts.

The best way would ultimately create a group for your area will be on your own – and continue to attract people who think your group.

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Mar 12

Financing your business without equity

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Many entrepreneurs believe that the most effective way to get their company to finance company (or Angel) financing. To ensure the venture capital, a number of advantages, there are two major disadvantages that must be considered. The first is that venture capital is very difficult to obtain. The second disadvantage is the focus of this paper is that venture capital requires the inclusion of a capital(Properties) and some control of risk. Many times, the stakes VC properties that may need to be substantial, so that the founders in a minority stake / position control.

There is no alternative to venture capital, which is often overlooked. This is a form of corporate financing that provides the capital needed to cover operating costs and offers to grow your business. It is easier to get a business loan or a joint-conventionalCapital financing. The problem is that it only works for certain types of businesses.

Your company sells its products to other companies or government bodies? If you do this, then you are with the fact that most companies are familiar with the payment of invoices within 30 to 60 days. But waiting for payment, you still need to pay suppliers and employees. Few start-ups or growth are necessary reserves to cover expenses, while they are waiting to be paid. This limits theirAbility to grow and benefit your chances of winning. Here is where your receivables factoring, you can help dramatically.

Factoring invoice, as noted, provides an immediate advance on your invoices. Factoring eliminates the need to wait for payment and you have the money to pay suppliers and employees. It gives you a solid financial base, which can arrive at new business opportunities.

One of the biggest advantages of factoringClaims is that it is relatively easy to obtain. To do so, the business of your company with credit worthy customers do not like big business or government. This is the most important assumption, because the bills are used as collateral for customers.

One of the main advantages of factoring receivables is that you must not give the factoring company, no shares or ownership of your company. Once you achieve your business goals – the game is done, you can guarantee yourRelationship with the factoring company, without any further obligations.

The cost of factoring varies on a number of parameters, such as the amount of funding is necessary, the creditworthiness of their customers and the stability of your business. In general, the monthly rates ranging from 1.5% to 3%, based on these criteria.

If your company sells its products, and wait up to 90 days to pay, you should consider factoring into consideration as an alternative to finance your business.

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Mar 10

The role Term Sheet, in the provision of risk capital

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Entrepreneurs and companies seeking venture capital often negotiate with one or more venture capital firms on a number of important issues. These include increasing the amount of capital to investment conditions, etc. The document, these concepts, like a sheet of "term summarizes known."

This Term Sheet is similar to a letter of intent, which means that it is a non-binding summary of the main points of the transaction. These points are thencovered in detail in the Stock Purchase Agreement and related agreements at the time of execution of the transaction is completed.

The value of the abbreviated term sheet format is that it accelerates the process of consuming a transaction. In particular, it allows the parties on the general conditions of the transaction agree to discuss, rather than less important details. Furthermore, why is not binding, it allows the parties to present their work to a higher level, without taking overthe danger of committing too much. Note, however, that some parts of a term sheet may be binding. Typically the binding aspects only refer to confidentiality and disclosure issues.

Venture capital company, not the company, the capital, typically prepare the term sheet with the conditions under which they are willing to have their capital to invest. Alternatively, to find the capital angel investor, companies usually their own term sheetsContribution to the angels. This fact tells us a bit 'the balance of power in a system of investment. Venture capital is often high and have more power than the company's capital. Alternatively, business angels are typically less sophisticated and have less power and are more sensitive investment, as the company set up to examine in search of capital.

Getting to a term sheet is an important stage in the capitalCollection process. Although not all the sheets of long-term consequences in a transaction that shows the term sheet that both parties are interested in justice, the composition of a transaction. It is then up to investors and companies agree on the details.

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Mar 10

Increase in working capital

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* All activities for a good cause

Take some time to sort through all your stores and audit services. This could mean that a journey to search for your enterprise storage and articles. Learn how to use objects that simply collect dust in order to increase profits.

Do you have employees that do nothing? Make a list of long-term goals for your business (ie open to start a new firm provides to clients, etc..) Then, create short-term goals that must beadded) any long-term goal (eg reach the research community who need such services, the purchase of a company car, and so on. Break these goals in the short term weekly / daily activities and ensure that you and your staff that what must be done to recognize and act forever.

* Get Rid Of Everything You Do not Need

Once you have all the supplies, including products, services, vehicles, etc., examined and put to good use to check what is left and remove.You can make money by selling unused items and services not desired. Unfortunately, the same goes for employees. If you find you have more employees than necessary, should complete its work, it may be wiser to forgive, what needs to another company

* What is the thing of unsolicited

All invoices that are more than 60 days must be maintained. With 30 days to review and staff have started work, you have the money to the account.

Read more debt, whichDevi and a schedule of pay when the individual. In general, the longer it takes to pay a debt that is more interesting for the collection. Debt ASAP you can pay a large sum of money in the long term, and the practice of quick and timely repayment can help to avoid delays in other sectors of the economy. Once the understanding of all debts and pay on time, your company is better organized and hold down the control and awareness of your finances.

* You can find an advisorTrust

A financial professional as an accountant, lawyer or financial adviser can help financial decisions if you are overwhelmed. But it is important that you trust this person and his sentence. Before a financial adviser, look at the history of their customers and find out if they have success with others. Ask other people how they think of financial advisory services and ask if they recommend their services. But it depends on yourFinancial Advisor for everything. Make sure that you can still capable of their own financial decisions, if necessary.

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Mar 10

Smart ways of Private Equity and Venture Capital

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The financing is a form of marketing, like any company, your journey is to raise capital as marketing activities are considered. I have a proposal to increase capital to 80% and 20% of marketing of Finance, a point that I felt quite agree.

First and most important, the process of lead generation: Generating leads can be found – a global private equity and venture capital, identified by investors guides and databases.

Secondly, the preparation is for Your "Sales Pitch" – because the venture capitalists look at your business. You have undertaken the analysis of competitors, the company can be exactly like the others? Create your Unique Selling Proposition – USP – in order to convince the private equity and venture capital investors on it.

Thirdly – you create a summary page – creating a 3-5 pager overview of your company, and use it as a document of private equity and venture approach > Investor. Some providers like to see the entire capital on a business plan, but generally begins with the summary page.

Fourth – They are the best salespeople for your company, not management consultants, it is always a lot of business consultants will try to help, fees vary, but at the end of the day, private equity and venture capital investors are not really interested in a conversation with management consultants. In fact, many private equity firms and> Venture capital firms have no idea of consultants. So you can only use business consultants doors open, but you have to close the deal himself.

Fifth – Always looking for opportunities in the world – looking for suppliers of risk capital in the open sea. If you have an international plan, you can always many more opportunities to raise capital from venture capital firms.

Six – Prepare marketing materials – to update the site,modify web pages for more investment grade, add more content for the site and the implementation of marketing activities, especially the more Web marketing activities.

Seventh – Get ready for an interview – interviews with private equity and venture capital is not a simple process.

I spent quite a bit 'me, and these are more difficult than the interviews. Many innovators are introverts, or talk a bit 'too many technical terms, these are not suitable forPrivate equity and venture capital. Remember, you're asking money from them – dealing with the income that can be done.

Remember, things are written in simple language that businesses understand the sources of capital with a 5 page summary pager instead of 300 business plans – as investors what they say. Warren Buffet investment clients include Never invest in products You Do not Understand, venture capital firms do the sameAlso – do not try too much technical language or speaking in their business plan.

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Mar 08

What Makes You Eligible for Venture Capital?

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A budding company or one facing major financial crisis can find solution to all its financial hurdles with Venture Capital. Unlike banks, Venture Capital firms are an important source of long-term growth capital.

Venture capital firms and individuals are interested in many of the same factors that influence bankers in their analysis of loan applications from smaller companies. Though banks look at the immediate future of a small company, they are most heavily influenced by its past. Venture capitalists look at the long-term future of the company. Banks are creditors while venture firms are owners. They hold stock in the company, adding their invested capital to its equity base. Therefore, they examine existing or planned products or services and the potential markets for them with extreme care. They invest only in firms they believe can rapidly increase sales and generate substantial profits. Venture capitalists look more closely at the features of the product and the size of the market than do commercial banks.

Venture capitalists invest in long-term capital and not for interest income. They look for three to five times their investment in five or seven years. The job of the venture capitalists is to find venture projects with this appreciation potential to make up for investments that aren’t successful.

It’s difficult to forecast the productivity of an early stage company. Hence, these venture capitalists set rigorous policies for venture proposal size, maturity of the seeking company, requirements and evaluation procedures to reduce risks, since their investments are unprotected in the event of failure.

Most venture capital firms’ investment interest is limited to projects proposed by companies with a sound operating history. Profits made by those companies aren’t given much precedence before an investment decision is made. Companies that can expand into a new product line or a new market with additional funds are particularly interesting. The venture capitalists provide funds to enable such companies to grow in a spurt rather than gradually as they would on retained earnings. There’re a large number of “start up” companies that get financial help from venture firms. Venture capitalists see that capital investment analyses and capital source studies are planned 5 years ahead. The investment analyses should compare rates of return for product, market, or process investment, while the source alternatives should compare the cost and availability of debt and equity and the expected level of retained earnings, which together will support the selected investments. These analyses and source studies should be prepared quarterly so you may anticipate the financial consequences of changes in the company’s strategy.

But a structured financial planning doesn’t guarantee that you’ll be able to get capital from a venture firm. Not making them, will virtually assure that you won’t receive favorable consideration from venture capitalists.

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Mar 08

Reverse Merger Pitfalls

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As I write this, very few, if any, initial public offerings for venture companies are being done. The IPO market is at a virtual standstill for companies looking to raise venture capital.

As the IPO market slowed, there has been a trend to more and more reverse mergers. As you may know, in a reverse merger, an operating company merges with a public shell or OTC shell to have publicly trading stock.

Generally, there are only two reasons to for going public, whether it is done with an IPO underwriter or through a reverse merger with a clean OTC shell. The two goals are to get capital and to get a liquid market, whether the liquidity is for the principal shareholders, employee shareholders with stock options or to attract acquisitions for stock.

For the company seeking venture capital, the reverse merger or pubic shell route seemed to be the only choice.

An SEC rule issued in 2005 requires companies merging with a public shell company to file disclosure with the SEC tantamount to the disclosure required in a full-blown IPO. This disclosure is filed in a Form 8-K, called a Super 8-K. The super 8-K must be filed within four days after the merger is closed.

This SEC Rule means that there are usually no real advantages in a reverse merger over a self filing.

I believe that more and more we will find companies, especially companies seeking venture capital, choosing a self-filing or direct registration to go public. In a self-filing, the company does not buy a shell but rather simply files a registration statement with the SEC. This registration statement is much the same as the super 8-K filing in information, time and expense.

The advantages of a self-filing are easy to understand. In a self-filing, you are saving as much as 20% of the stock in the operating company that would otherwise go to the shell company shareholders. You also save having to pay at the same time a large amount of cash, typically $50,000 to $750,000, to the shell promoters, in addition to your legal and accounting bill.

It is true that a shell already has a trading market, as the promoters will tell you. As a former OTC market maker who traded shells, many IPOs, and many venture companies, I can tell you with authority that the trading market for any shell is weak in volume and market makers. The trading market for any decent operating or venture capital company will easily surpass any shell’s trading market you care to name.

Shell promoters further point to the fact that the shell comes with many shareholders. They call this distribution. However, when you start to look deeper, ask questions, and do the math, you can discover that this also is illusory.

If the shell is 60% owned by the promoters and has another 200 shareholders, this means that the average shareholder pre-merger owns one-fifth of one percent of the stock. In the reverse merger, even if the shell shareholders receive 20% of the stock in the combined company, this means that the promoters now own 12% of the combined company and the average minority shareholder of the shell company now owns two-one hundredths of one percent (0.0002) of the combined company.

If the operating company was worth $25 million pre-merger, the shell promoters now have stock worth $3 million to throw on the market. Millions of dollars of stock will have to be removed from the market before new buying can have a beneficial effect on stock prices.

This will not make for a good trading market. Based on my experience, the shell promoters will do whatever it takes to get cash fast, causing the shell stock price to collapse. The minority shell shareholders may not even be aware that they have stock in a new company.

Even if the operating company does a large amount of investor relations to promote their stock, the market usually collapses. As the price collapses, all investor interest in the company usually goes with it. It is very unattractive to investors if you stock is selling at a bid of $0.0001 per share?

Consider the effect of a weak stock on the goals of doing the reverse merger. Does a weak stock price help to raise cash or venture capital? No. Does a weak stock price provide liquidity to key employees? No. Does a weak stock price help management acquire other companies for stock? No. Thus, all of the original goals of the operating company are often crushed by a reverse merger done ineptly.

Self-filing have a better outlook. Selling stock to friends, family, employees and associates of the company can create two hundred shareholders. These people are likely to make loyal shareholders. The block of stock in the hands of the shell promoters is gone so there is no overhang of stock depressing the market.

Seriously studying the self-filing and the reverse merger shell deal can cause you to want to do the self-filing.

Having a good, experienced professional working with you is important now matter how you do your deal. Naturally, the key skills you need are those of the corporate lawyer, the investment banker, the security analyst, and the market maker. I trust that you will discover the wisdom in having such a team behind you. There are many traps for the unwary in the financial markets and mistakes can be more than expensive, they may even stop your company’s development altogether.

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Mar 08

How to Use Factoring to Finance Your Company

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Getting business financing is tough when the economy is doing well and almost impossible when the economy is doing badly. There is a reason for this, lending money to a business is considered risky, especially for financial institutions. This is why most institutions will ask for audited financial statements and will insist that your business must have good collateral. What qualifies as good collateral? Usually real estate, machinery and accounts receivable in some combination. Furthermore, institutions also want to see a multiyear track record in which your company shows substantial growth.

But – what if you own a startup? Don’t have hard collateral? Or, what if your business is in a turnaround situation? Usually, you’ll be out of luck. Fortunately, there are other options.

There are alternate business financing solutions that can work well in many instances. For example, let’s say that your commercial clients take 30 to 60 days to pay their invoices. This can create a challenge for most businesses. If you can’t get a conventional business loan, a good alternative is to use factoring. Factoring, which has been gaining traction recently, provides an advance against your slow paying invoices. It provides the working capital you need to pay business expenses and eliminates the timing challenges of waiting for payment.

Here is how it works. Let’s say that you sell a product (or service) and then invoice your client expecting payment in about 45 days. A factoring company can advance about 80% of what is due to you within days of invoicing. You get the remaining 20%, less a service fee, once your client pays the invoice in full.

Stated differently, you get about 80% soon after invoicing, and the remaining 20% (less the fee) once your client actually pays.

For most businesses, getting an 80% advance spells the difference between being able to run the company and going out of business. It provides the liquidity to pay employees and suppliers in a timely way. For many, it allows them to take new clients without worrying about their payment terms.

Factoring companies consider your invoices from good credit worthy clients to be excellent collateral. This enables them to advance money against them. Now, this does not mean this is the only criteria they will look at. Most factoring companies will want to make sure that your company is free of judgments, lawsuits and liens.

One critical advantage of invoice factoring is that it works very well for startups. Most factoring companies are happy to work with clients whose biggest asset is a roaster of good paying clients.

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