Entrepreneurs: Beware of “Special” Advisors

Watch Out for Special Advisors

UNSOLICITED ANGEL ADVICE: Entrepreneurs: Beware of “Special” Advisors A large part of the New Mexico Angels’ mission is to educate entrepreneurs and investors about raising and deploying capital. You see, it is in our best interests as investors to put money into companies that are well versed and educated on equity investments and the interesting issues that come about in seeking such. Over the last few years, we have seen the rise of a new and interesting player in the start-up capital realm. The following…

Stock Vesting – The Investors & Entrepreneurs Bestest Friend

Equity Stake

Sometimes being a successful Angel investor is just chalked up to luck, because for every success there are a number of failures behind it. The same can be said for entrepreneurs, success and failures come by in many ways, some planned and some that just pop up out of nowhere. In both cases we have learned that failures are nearly always due to people and relationships. So how do you protect yourself from failure? Due diligence and vesting of stock to founders, early hires and…

A Billion Here, A Billion There

The world is inhabited with a number of individuals that can sell ice to Eskimo’s. The investment community is also populated by a number of individuals who try to sell dreams to investors that may not make economic sense, but the salesperson is so personable that the investors gets caught up in the dreams of future and ignore basic due diligence questions. Example 1 – Doug Vaughn Recently in New Mexico, we had a firsthand example of investors ignoring basic due diligence in the form…

Beware of Some Entrepreneurs

In our line of work we see every type of entrepreneur there is, here’s a few we were able to profile. Paranoid Entrepreneur.  This entrepreneur is scared of their own shadow.  They call you over and over to discuss their idea but never tell you what it is.  They talk about their best friend whose idea stolen by investors.  They tell you that their invention/idea will change the world.  They ask you to sign an NDA but never get around to sending you anything. Harvard…

Beware of Some Angel Investors

The profile of an Angel Investor can come in many forms, but not all are good. Although we’re Angel investors ourselves, we understand that relationships can break a company, so look out for these types of Angels. Shark Angels This is the ultimate bad guy whose sole intention of getting involved in early-stage investing is to take advantage of what they believe is the entrepreneur’s lack of financial and deal-making experience. If the term sheet process turns to pure torture, it may be time to…

Cramming Down Grandma: A company valuation lesson

photo of grandma

One of the biggest challenges with closing an angel deal is the valuation discussion with the entrepreneur.

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