“...I still lose one third of the capital I invest. Consider yourself thoroughly warned!
”
I’ve had a few really big wins and those have made me a lot of money. As a result I can afford to lose money or wait a long time for a result which is really important.
How do you do it as well as you can?
Investing in businesses and people that you know is a big reducer of risk. Just a note of caution friendships do not always survive being investors in a deal which has problems – in these circumstances having a third party as a director or chair can greatly ease dealing with issues like needing to get your brother-in-law out of the CEO role......
Do not bet all your spare cash on one deal. If it struggles your inability to take the loss may all too easily mean you lose judgement and keep funding a hopeless case. If the management of a deal have got some money do not invest unless they commit a meaningful amount of that cash to the investment. Obviously this shows they believe in it and tends to stop them moving out when issues arise.
Be very wary of “placings” – this is where a corporate financier has a glossy book but you don’t get useful legal protections
(warranties that you have been told all the facts, the CEO cannot fix his own salary and the like). Their failure rate is very high. Do get good legals – it’s too complex to cover here but a good lawyer will be
worth paying
for.Many propositions will arrive with financial forecasts. These are often stupidly optimistic or not thought through. Quite often they actually show the business to be so good it does not need the money they are asking for. (Honest – it’s really common.) Test forecasts, look at similar businesses and form your own view. If you are not competent to do this don’t be an angel.
Don’t go in at a silly price. You get one crack at buying correctly. If it works you deserve to make at least three times your investment to cover the risks and inevitable failures.
A lot of UK angel
fundraising is done relying on UK tax breaks (EIS, SEIS, etc.) to make a deal attractive. If you live in the glorious Channel Islands you don’t get these so the price may be too high for you.
There is new way of being an angel – crowdfunding via the Internet. Have a look at some sites and you could dip a toe into these dangerous waters in investing small amounts. Well worth an hour or two looking.
I enjoy being an angel but then I’ve always preferred doing the difficult. It’s stimulating and
intellectually difficult. You meet the widest range of people you could imagine and sorting out the backable ones is an art form itself. It is addictive! Good luck. It’s essential.
T: 01534 620500
www.sinels.com
20/20 Finance & Investment Page 77
Exceptional Jersey law advice. Always.
Corporate & Commercial Debt Recovery
Dispute Resolution Employment
Fraud & Asset Tracing Financial Misselling Negligence
Private Client
Personal and Family Law Trusts
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96 |
Page 97 |
Page 98 |
Page 99 |
Page 100 |
Page 101 |
Page 102 |
Page 103 |
Page 104 |
Page 105 |
Page 106 |
Page 107 |
Page 108 |
Page 109 |
Page 110 |
Page 111 |
Page 112 |
Page 113 |
Page 114 |
Page 115 |
Page 116