The CEO's Handbook - Volume Three
F O R I M M E D I A T E R E L E A S E
Monday, April 11, 2011
The third volume of The CEO’s Handbook series has been published. The latest volume focuses on Angel Investors. According to Dr. Smith, “I wrote this book to help CEOs better understand Angel Investors. Getting funded is one of the major challenges that they face. Without adequate financial resources, a company will be limited in what it can accomplish. The journey to funding is full of twists and turns - journeys into unfamiliar territories”
The book help founders who are searching to early-stage funding. It provides insight into how angel investors analyze companies, what they look for and expect and how best to approach them. It also describes angel investors that should be avoided.
Excerpts from Volume Three:
Angel’s Sins: In the start-up world, one in ten companies makes it to their fifth anniversary. My experience has been that most that fail do so because the team has performed poorly in the business of business - in other words, they do not fail because their value proposition - or the technology the heart of that value proposition - is faulty. They fail because they have not implemented the strategic and tactical vision in a way that generates revenue and an expanding customer base. Angel investors have it in their power to improve the odds. However, to do so requires a more focused and professional approach.
Angel Investors – The Good, Bad and Very Ugly: There is a tendency among entrepreneurs to chase money wherever they find it. The pressure to find the financial resources so necessary to build a business can be over-mastering. Most of the time the partnerships which form between founders and angel investors are productive but, in a few cases, I have seen it turn very destructive. Companies that should have realized success have been held back by investor partnerships that have severely limited their potential or, in some cases, doomed them to failure.
Angel Investors – The Good, Bad and Very Ugly: Good angel investors always take a highly professional approach to the process and their portfolio companies. They generally focus in industries that they are familiar with. It is a good idea to avoid angel investors whose portfolio companies do not fit a close pattern. The best angel investors will often forgo the option of claiming a board seat and, instead, insist that an independent board member with professional experience be appointed. Beware of investors who seem to see investment in your company as an opportunity to enhance their reputation by sitting on yet another board.
According to Dr. Smith, “I am indebted to those angel investors that I have worked with. Their willingness to talk openly about their mistakes - the opportunities foregone - as well as their successes - has made this book possible. Without that, I would just be writing fictional accounts of a process that I viewed from a non-investor perspective. I dedicate this book to all of them. They are, after all, angels”
Dr. Earl R. Smith II, (202) 337-4473, DrSmith@Dr-Smith.com
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