Entrepreneur and Angel Investor
Entrepreneurs must recognize that investors are not funding their company to help the entrepreneur build the company as fast and as far as the entrepreneur can build it. The investors objective is to quickly scale the company to a size and level of profitability that a larger company will be interested in acquiring their company...
Your business plan and executive summary must be non-confidential documents. Do not include a confidentiality agreement or non-disclosure agreement as the opening page of your business plan. Upon seeing such a page, most serious investors will simply return the plan unread.
Angels typically invest in multiple rounds of investment in their portfolio companies. They do so for two reasons: (1) their portfolio companies tend to need more money than they think they will and (2) angels often invest in subsequent rounds to prevent dilutions of their ownership percentage.
Pre-money valuation - The value of the company at a time immediately before closing a new round of investment in the company. For a company which has not raised any significant money in the past, to what assets are we attempting to assign a value?
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Bill Payne has been actively involved in angel investing since 1980. He has funded over 50 companies and mentored over 100. He is a founding member of four angel organizations: Aztec Venture Network, Tech Coast Angels, Vegas Valley Angels, and Frontier Angel Fund.
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