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Does It Cost Anything To Register Your Investment Profile?
Can An
Investment Profile Be Amended?
Who Is Private Equity
Match?
What Is Angel Investing?
Who are Angel Investors?
What Is Venture Capital?
What Are The
Investments Stages?
What Do Private Investors Find Attractive In An Investment?
What Hedging Strategies do Investors Use To Limit Their Downside
Risk?
Does It Cost Anything To Register Your Firm's Profile?
There is a small annual fee which provides you with a great deal of information and marketing opportunities, including:
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Your firm is listed in the Category which is most appropriate, along with a brief description of your services and contact information.
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You will be notified of all Entrepreneurs requesting assistance matching your profile.
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You will receive a copy of the "Private Equity Preview".
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Private Equity Match will provide the ability for entrepreneurs, investors and visitors to easily make contact with you via email.
Can An
Investment Profile Be Amended?
Yes – Simply login and Edit your Profile.
Who Is Private Equity
Match?
The founder and principal of Private Equity Match was the
founding partner of a boutique investment banking and financial
consulting firm. In 1999 the firm became associated with an
international angel investment network that is responsible for
investing over $250 million in early and expansion-stage
companies. During the last few years it became quite evident
that the firm did not have the human resources to assist all of
the worthy entrepreneurial projects that it was presented. In
order to assist more of these very deserving early and expansion
stage projects, we have developed a confidential match service.
The system confidentially matches investor profiles with
entrepreneurial projects, allowing the exchange of information
and contact information to facilitate discussion between
investors and entrepreneurs.
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What Is Angel Investing?
Entrepreneurs with start-ups and expansion-stage companies
have used up their own money, spent money from family and
friends, and cannot qualify for any or additional bank loans or
funds from venture capital firms. They need funding from private
individuals or equity firms (Angels) to remain in business. The
angel investor market is approximately $40 billion a year.
Who are Angel Investors?
Angel investors are wealthy individuals and families willing
to invest in high-risk deals offered by people they admire and
with whom they seek to be associated. Angels are also
financially sophisticated private investors willing to provide
seed, start-up and expansion capital for the higher-risk
ventures. Angel investors possess the discretionary income
needed for such risky ventures. In fact, a portion of their
private equity portfolio is often set-aside for this purpose.
Angel investors also possess a healthy appetite for
self-arranged private deals. Such direct investment serves to
maintain the self-confidence of these high-net-worth investors
and demonstrates their continuing ability to make money. These
investors have amassed wealth precisely because they know how to
invest. Currently there are about 300,000
active angel investors, but the potential pool is much larger.
About 2 million individuals possess the discretionary net worth
to make angel investments. The private
investor typically has a postgraduate education and extensive
previous management experience. They probably owned their own
companies. They are very interested in earlier-stage and
expansion companies because they can aggressively negotiate
strong discounts, and they find the potential for high returns
through capital appreciation is best realized through these
pre-IPO deals.
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What Is Venture Capital?
Financial capital supplied to young, innovative and
expansive ventures, where both the risk and the potential
returns are high. The Venture Capital offered by Angels tends to
be more speculative and early-stage than that traditionally
provided by the formal venture capital industry. Venture Capital
firms have become more like money management firms and tend to
gather larger pools of money. As a result, the size of their
investments has increased, leaving seed and start-up stage
companies to be funded by private equity.
What Are The
Investments Stages?
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Seed – means that a company is in the idea
stage when the process is being organized;
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R&D – is typical of the financing of product
development for early stage or more developed companies.
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Start-up – designates a venture completing
its product development and initial marketing.
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First Stage – Working prototype, which has
gone through beta testing and is beginning commercialization.
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Expansion Stage – Expanding
commercialization and is in need of growth capital.
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Mezzanine – Increasing sales volume and is
breaking even or is profitable. Funds are to be used for further
expansion, marketing or working capital.
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Bridge – designates a venture requiring
short-term capital to reach stability.
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Acquisition/Merger – refers to a company in
need of capital to finance an acquisition or merger.
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Turnaround – denotes a venture in need of
capital to change from unprofitable to profitability.
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What Do Private Investors Find Attractive In An Investment?
A recent study of investors tells us that they are looking
for something they can identify with. They are looking for
something that provides fun. Everyone seems to imagine that
these investors are looking only at a return on investment.
Return on investment is important, but these investors are
looking for much more. Having already displayed their ability to
make money–which has positioned them to be able to invest
again–they are looking for something they can get involved in,
something that excites them, something they can understand, and
identify with. And, as we have said, it is fun to make money.
Real excitement occurs with what we call the pre-IPO
(pre-initial public offering of stock). The only way to make $1
million to $5 million with $100,000 is to get involved in a
pre-IPO project. A lot of people do not because they worry about
the risk, but there are ways to manage and hedge against the
risk. And if you hit a home run two out of
ten times, the returns can be significant and more than enough
to make up for those risks. In addition,
investors are looking for deals that have a proprietary
advantage or unique technology that positions that venture ahead
of any competition. Investors are looking at recipients of
capital who can articulate that competitive advantage in their
documentation. The financial statements must spell out the
potential and promise for ROI and must offer multiple scenarios
supporting the figures. The argument and potential for return on
investment must be strong. And where there is no history of
profitability, entrepreneurs need to have a track record
elsewhere in the industry. The key to
investment are the people. Business plans do not get funded,
people get funded. Investors prefer a superior management team
with a mediocre product over a superior product and a mediocre
management team.
What Hedging Strategies do Investors Use To Limit Their Downside
Risk?
Hedging strategies begin by conducting thorough due
diligence and by being thorough in all investigation related to
due diligence. It is much more important to avoid a bad
investment than to try to hit a home run. After all, angel
investors are making an average of between one and three
investments per year. So their ability to diversify risk becomes
limited. They can manage only so many value-added investments,
which take huge chunks of time to administer.
Hedging strategies begin with due diligence, but they continue
by negotiating steep discounts very early on in the negotiating
process for the risk being taken by these early stage investors.
These investors rarely invest at the price valuation suggested
by the entrepreneur.
Another way to hedge is by syndicating as early as possible.
Bring other investors into the deal, backing off what you might
have planned as your investment amount. Say an investor plans to
put in $250,000. The investor backs off to $125,000 and attracts
other investors who come in and do a couple of things. One, they
carry on due diligence. Two, they confirm–or fail to confirm–the
original investor's opinion. And three, if the additional
investors do confirm, they share the financial risk.
Another strategy involves individuals using other people's money
as soon as possible in the transaction. For example, rather than
investing in the venture directly, an individual may provide a
guaranteed line of credit as a part of the transaction. This
saves the investor from touching current cash flow but
guarantees his or her participation while using other financial
capabilities that he or she possesses.
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