Month: January 2015

SeedInvest Joins Angel Investors Network

HELPING INVESTORS DISCOVER EXCITING INVESTMENT OPPORTUNITIES

SeedInvest works closely with entrepreneurs to connect them to value-add investors like yourself. We help investors cut through the noise by curating companies that will resonate with you.

SeedInvestHighly Vetted Deal Flow.

We believe in quality over quantity. Unlike other platforms which merely act as listing services, 2% of companies that apply are approved and listed as vetted opportunities on SeedInvest.

SeedInvestNo Carried Interest

Unlike other platforms who take 20% of the upside through carried interest, SeedInvest is free for investors. Carried interest can have a signifificant impact on returns.

SeedInvestActive Partner

We are not just a listing service. Our team has helped manage billions in private investment funds and has raised hundreds of millions for companies.

SeedInvestEasier Diversification

Our minimum investments are as low as $2,500, which can be 10x-20x smaller than typical minimum angel investments, enabling much easier diversification across industries and geographies.

 SeedInvest

 

 

 

Shark Tank Tree T Pee Episode! Brings you to tears!

https://www.youtube.com/watch?x-yt-cl=84838260&x-yt-ts=1422327029&v=f2M5pxTrhYE

What a great episode! Farmer walks away with a deal and the Hearts of America!
A second generation farmer and entrepreneur went on ABC’s “Shark Tank” to pitch a product and story that is still resonating in the hearts of many across the country.

Johnny Georges, a farmer from Florida, created the “Tree-T-Pee,”a device that, when put around the base of a tree, can save a farmer thousands of dollars in irrigation fees by containing the spraying water in a small space surrounding the base of the tree.

Though it seemed as if Johnny suffered from a rough start at the beginning of his pitch due to some tough questions, he stayed true to himself when pressured why he refused to raise his prices: “I work for farmers. It’s what I do, and helping them helps us all,” Georges said.” “It’s not about the money to me. It’s about doing what’s right.”

Shark investor John Paul DeJoria jumped on board and accepted Georges offer of 20% of his company for a $150,000 investment. “When Johnny said that this Tree-T-Pee saves 3,000 percent on water, you only use one-30th the water, that’s when I knew this was good for farmers. It’s good for America. I want to be this guy’s partner.”

Shark Tank, the critically-acclaimed reality show that has reinvigorated entrepreneurship in America, has also become a culturally defining series. The recipient of the 2014 Emmy Award for Outstanding Structured Reality Program, the business-themed show has returned to the ABC Television Network for its sixth season.

Bitcoin An Alternative Investment

According to bitcoin news site CoinDesk, 2014 venture capital has flooded the bitcoin ecosystem reaching over $110 Million. Marc Andreessen, a well-known entrepreneur and investor, is betting big on the future of bitcoin with investments totaling upwards of $50 million. The Wall Street Journal’s Gregory Zuckerman reports that Andreessen has no plan on slowing down, claiming that he will invest “hundreds of millions” more in bitcoin related businesses. “You know, magic markets don’t appear all the time, so you take advantage of them.”- Marc Andreessen

The beauty with this revolutionary “magic market” is that there are ample opportunities for high net worth individuals to get their “piece of the pie”. Wallet providers and exchanges, such as Coinbase, charge a premium on the bitcoins sold through their website. Someone interested in investing millions should realize the accessibility of the vast market in front of them. There is not only money to be made through capital gains, but also in creating, stabilizing, and maintaining the bitcoin network.

Investors have an alternative to purchasing bitcoins through exchanges; they can create their own through a process known as “mining”. Cloud mining contracts have arisen recently as a new form of an alternative investment. Investors can purchase a specific amount of hash power for a pre-determined amount of time. Furthermore, there are no additional costs associated with mining; such as electricity and maintenance. The customer pays an upfront amount and in turn receives bitcoin payouts for the length of the contract. There is No need to worry about the increasing difficulty of the network because once the contract period is over, you can renew with an increased amount of hash power to maintain your anticipated profit margin.

The opportunity to mine bitcoin will only be available for the next few years. A predetermined amount is set within the network at 21 million bitcoins. Once all have been mined, the network protocol will switch its incentive method to transaction fees only. The technology was designed to be inflation free so inevitably the demand for a single bitcoin will go up, in turn driving up the price.

 

An Entrepreneurs Commitment Is Key For Success

Your commitment is key! As an angel investor this is one of the main factors I look for in an entrepreneur before I even consider investing.

To give this statement real meaning, let me share a story about commitment that changed my life. It still affects decisions I make almost every day.

One day I was speaking at a CEO networking event and I met a gentleman who had recently retired from a multi-billion-dollar company where he ran a billion dollar division. We started talking about commitment and he shared with me that his division spent over a million dollars on a study about commitment. Needless to say I was floored that they would spend so much money on this subject. They did so to improve their company’s performance.

In the study, they found that the more a person is committed to his project, the better the chance of his being successful. Even then it is still hard work and often a really tough journey. He explained that they came to the conclusion there were different levels of commitment. This was a very interesting discussion, and it got real sobering, real fast!

Their study of these levels of commitment revealed that if YOU aren’t one hundred percent committed, then you really don’t stand much of a chance to succeed. Here are the numbers as I remember them. They are quite sobering.

• People who are 70% committed only have a 20% chance of success.

• People who are 80% committed have a 40% chance of success.

• People who are 90% committed have a 65% chance of success.

• Peoplewhoare100%committedhave a 75% chance of success.

I hope that everyone reading this will take this very seriously and really think about your “level” of commitment. It takes commitment to your venture, your capital raising efforts, and your business.

Every day since I had that conversation, whenever we are making decisions about starting a new company, investing in a company, starting a new division, a new marketing plan, or basically anything, I ask myself if I am one hundred percent committed to seeing this through. Will I have a “never give up, never quit” attitude? Will I allocate the proper time and resources to make this a reality? Am I one hundred percent committed to the success of my project?

This thought process has saved me thousands of wasted hours and tens of thousands of dollars. Everyone who knows me knows that I am a never give up – tenacious – I’ll figure out a way – committed individual.

The very minute you accept that first check from an investor, you must have a new commitment level, because you are taking someone else’s hard earned money to fulfill your dream. One of the things that I look for as a personal investor, the thing that all professional investors look for, is commitment. Investors must be able to see, hear, and feel commitment every time you mention the project.

I can’t stress how important this is, and how important it is for you to make sure your investor prospects understand your commitment.

When I was an investment banker, people would ask me to raise money for them. One of the first things I would ask is, “How much of your own money have you invested in your company?” This was a great question from which to gauge their commitment level. You better have a good answer when you are asked this question. I can promise that it will be asked.

Now, if you have a great project and simply have not had any money to invest in your project, that’s okay. But if you have money and have not been willing to invest in your own project that screams a lack of commitment. I want to hear the words, “I’ve invested every dime I have, mortgaged my house, spent my savings, and borrowed as much as I could on every credit card I have.” That shows commitment.

The next question I would ask is, “How much money have your friends and family invested?” Of course most of the time the answer would be something like, “Oh Greg, I would never ask my friends and family to invest.” Wrong answer!

I know it can be a mental hang-up for some people to ask their friends and family to invest in their deal. They may feel uncomfortable doing it. But how can you possibly ask an investment banker, or anyone else for that matter, to invest in your deal if you’re not comfortable asking your own friends and family? Investors must see that you are one hundred percent committed. Having the courage to approach friends and family is one way of showing commitment and confidence in your project.

Investors want to know that you are all in. They want to see that you have absolute faith in your own dream, faith in yourself. In order for people to invest in your deal, they must believe in what you are doing and in your vision. You want people’s support because of your absolute certainty that, when you are successful, they will make a lot of money. You want those who get behind you to feel good about supporting you. As long as they invest with a proper understanding of the risks versus rewards, it will be okay.

You must go into this with absolute faith in your dream and your eventual success. This is the level of commitment that an investor looks for.

Key Factors that Influence the Valuation of a Company

The value of the company is in the eye of beholder. Investors should carefully evaluate information they can obtain about the company in order to develop expectation of current and future value.

The value of a company is determined by both internal factors, which are subject to the control of management, and external factors, which are out of the control of a company. The reason for, sometimes, wide range in value estimates by various investors is the knowledge about the key value drivers.

HERE ARE KEY FACTORS THAT INFLUENCE THE VALUATION:

angel investors

Investors should evaluate company’s value drivers by com- paring them to industry peers. For example, one can start with historical price-to-EBITDA multiples as follows:

angel investors

Why, then, are there such huge differences in value and multiples paid? Profitability, Risk and Growth drive the differences.

PROFITABILITY. All else being equal, more profitable companies are more attractive to buyers and often command higher multiples.

GROWTH. All else being equal, companies that demonstrate stronger growth trends are more attractive to buyers and often command higher multiples. One has to be careful. The growth needs to be profitable, i.e. additional revenue needs to be generating similar level of profit. Notice what happened to Amazon when it announced higher revenue but even lower than expected profit. The stock price dropped over 10%.

RISK. The higher the risk the lower the multiples and thus the value. Here are some typical factors that contribute to risk for a company:

• Market analysis – barriers to entry? Positioning/ differentiation? Market share?

• Management – depth? Age and amount of experience in industry and company? Succession plan? Key man insurance?

• Customers – concentration? Is the revenue recurring or non-recurring from the existing customers?

• Vendors – concentration? Contract terms?

• Lack of product, market, industry, or geographic diversification

• Financial position / strength of balance sheet – What is current capitalization (debt and equity)? What is Net Working Capital requirement?

• IP/Legal risks – Is IP patent protected? Are trade-marks registered? Are there any existing or pending lawsuits? Any regulatory exposure?

• Infrastructure – Are there any required or deferred capital expenditures? Quality of IT infrastructure?

• Internal controls – are there third party audited or review financial statements? What is the spending approval process?

Once the above data is gather for the target company, investors can develop their own initial valuation range. As new information becomes available thru due diligence process the range may change or narrow.

The above process can also be used to project future value. The chart below shows current and potential future value for a sample company. In this case, the investors are counting on the company to increase profitability and reduce certain risks. These two changes would justify increasing the multiple for the business (based on transaction for similar companies). Higher profitability increases the value of the business as well.

when it announced higher revenue but even lower than ex- pected profit. The stock price dropped over 10%. RISK. The higher the risk the lower the multiples and thus the value. Here are some typical factors that contribute to risk for a company: • Market analysis – barriers to entry? Positioning/ differentiation? Market share? • Management – depth? Age and amount of experi- ence in industry and company? Succession plan? Key man insurance? • Customers – concentration? Is the revenue recur- ring or non-recurring from the existing customers? • Vendors – concentration? Contract terms? • Lack of product, market, industry, or geographic diversification • Financial position / strength of balance sheet – What is current capitalization (debt and equity)? What is Net Working Capital requirement? • IP/Legal risks – Is IP patent protected? Are trade- marks registered? Are there any existing or pend- ing lawsuits? Any regulatory exposure? • Infrastructure–Arethereanyrequiredordeferred capital expenditures? Quality of IT infrastructure? • Internal controls – are there third party audited or review financial statements? What is the spending approval process? Once the above data is gather for the target company, investors can develop their own initial valuation range. As new informa- tion becomes available thru due diligence process the range may change or narrow. The above process can also be used to project future value. The chart below shows current and potential future value for a sample company. In this case, the investors are counting on the company to increase profitability and reduce certain risks. These two changes would justify increasing the multiple for the business (based on transaction for similar companies). Higher profitability increases the value of the business as well.

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