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Animated Angels. Free Animations.Animated Angels. Free Animations, animated gifs and resources. Read full post here. (c) animated angels MySpace Layouts. animated angels Friendster Layouts ...Please wait... This may take some time. Read full post here. (c)
Are Angel Investors Really "Angels"?With today's freeze on Canadian and American Business Loans many business owners are looking to "Angel Investors" for the much needed funding needed to sustain the market conditions today. But are these Angel Investors really Angels - Sometimes yes, if there is one thing that I have learned over the last 15 years in Commercial Finance is that there is always good and bad in every scenario. It is just a matter of what outweighs the other. Of the US companies that received angel funding in 2007, the average capital raised was about US$450,000. However, there is no "set amount" per se for angel investors, and the range can go anywhere from a few thousand, to a few million dollars. Software accounted for the largest share of angel investments, with 27 percent of total angel investments in 2007, followed by healthcare services, and medical devices and equipment (19 percent) and biotech (12 percent). The remaining investments were approximately equally weighted across high-tech sectors. Angel financing, while more readily available than venture financing, is still extremely difficult to raise. Many times Angel Investors will take security in their investment in many different forms such as shares in the company with guarantees on performance, repayment terms based on a specific amortization. Most angel investments are lost completely in the early stage when the company fails. Professional angel investors look for investments that have the likelihood to yield at least 10 or more times their initial investment within a 5 year amortization. This is achieved using a predefined exit strategy which can range from public offerings, takeovers or liquidation of the company assets. Most Professional Angels do not take the human element into consideration as it is a business decision so if you have poured your soul into the company and the aggressive terms are not met for repayment, you will likely loose your company. Currently, Angel Investors are setting their sights even higher. No longer will a 1000% return on investment be attractive, now they are looking for the potential to provide a 20x-30x return over a five amortization period. This is due to the failure rate of businesses over the last 2 years because when you take into account the need to cover failed investments and the sustained investment time for even the successful ones. That being said, when you take into account the failure rate of Angel Investor Portfolios, the actual effective ROI for a average successful portfolio of angel investments is around 20-30%. The investor's requirement for a high ROI on their investment will make Angel Financing an expensive source of funds. Less expensive sources of funding, such as banks, are rarely available for most start-ups because they are too small or young to qualify for their Commercial Loan products. Despite the costs, "many entrepreneurs are taken aback when angel investors they approach for funding turn out not to value their companies as highly as the founders do. This is why timing is key: If you go looking for investors too early in your company's growth trajectory, the valuations will likely be lower than if you seek backers after gaining some momentum and market success." So if Angel Investors are not the answer, what is? Whether you are in Canada or United States, there are options. Here is an example of a real life scenario that was used to avert the Angel Investor. A distribution company in Alberta Canada had an innovative product that the owner had been trying to market across Canada and the United States. He went to the banks and was turned away. He went to see some Angel Investors whose terms were so restrictive he would loose control of his company and the majority of profits that he was looking at would be given to the Angel Investor. He had considered it but then he came across a concept he had not considered called Accounts Receivable Factoring and Purchase Order Financing. The company had sent out 2 orders which had completely exhausted his inventory and in order to get more inventory he needed a loan or advance. Within a matter of a couple of days the application was approved and the company had its financing in place within a week of the initial application. As soon as the new Accounts Receivable Factoring and Purchase Order Financing was set up at a very competitive rate which the owner of the company was more than happy to accept business took off now that the cash restriction was not longer there. Now the Angel Investors were pursuing the company owner with propositions of their own looking to invest money at a much reduced fee. The moral of the story is quite simply, even if you are turned down by your bank, and you are not interested in giving your company away, there may be options to be had. Do your homework and seek alternative Commercial Finance options. Wade Henderson Wade Henderson is a recognized Professional in Commercial Lending with over 14 years Experience in the Business Finance Field and a strong reputation for getting the deal done. Visit IMMFinancial.com to put his experience to work for you. Commercial Mortgage * Commercial Mortgage Loan * Commercial Lenders * Commercial Mortgage Canada Be sure to View Pro-BargainHunter.com and IMMFinancial.com for more information.
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