Reader Question - Do I Need To Be Charismatic?

Hi Evan,
I have recently discovered your website and browsing the various resources that your site offers. I appreciate them very much. I am a fresh graduate from UBC in Applied Science, Electrical Engineering. I started working at Canada's number 2 telecommunications provider shortly after my graduation from UBC. I have searched within the organization to examine the leadership qualities exhibited by the company's executive leadership team. I have come to realize that leadership is based on very simple ideas.

I feel that I have the ideas and the intelligence (don't we all) to create and grow leading businesses. One quality that I feel I lack is charisma. I am not awkward, but I am not a salesman. In your experience, does someone like myself have the potential to grown that charismatic personality, or should I focus my career on developing my stronger traits, such as my analytical and creative abilities? If I will always be someone who lacks the charisma to charm all my audiences, should I give up the idea of being the CEO of leading edge companies, and focus on other roles, or do you think I could still fill such a role successfully?

Again, I would like to thank you for the resources that you have made available. I have a couple of business opportunities awaiting me, and I am in the due diligence stage of one of them. Because of the generosity of your site and the relationship it has built, I will openly look for ways that I can employ your services. Can you tell that I have been reading some of your Marketing advice from Michael Hepworth?

Sincerely,

Matthew


Hi Matthew,

The key is to know what you're good at and find a way to make money doing it. I've met a lot of entrepreneurs who have built multi-million dollar companies who are not very charismatic at all.

By the same token, I've made many charismatic people who have failed miserably at being an entrepreneur.

What you need to do is pick an industry that you are passionate about and you can be outstanding in.

Every company needs a team of people to be successful. The first step in building this team is recognizing what your individual weaknesses are. Surround yourself with people who complement your skills and can help you build a world class organization.

Good luck!

Evan.

For more information, visit www.EvanCarmichael.com.

Angel Investors - The Who Matters

Getting the right funder raises the value of the company and lends credibility. Angels can bring a lot more than just money to your business.

Classic example: Harvey Firestone - "Above all, Firestone wanted the backing of Will Christy, president of the Central Savings & Trust Company of Akron and "the biggest man in Akron." Christy's support, Firestone recognized, would be not only valuable financially but invaluable in lending the business the prestige to attract other investors."

For more information, visit www.EvanCarmichael.com.

Angel Investors - Why Angels Say No

Angel and entrepreneur have different values, no trust

Entrepreneur shows resistance to due diligence and defensive responses

Entrepreneur has a passion for technology over flexibility

Entrepreneur has poor knowledge of market, competitors

Angel does not have ability to work with team

Entrepreneur has "shopped the deal" and seen too many potential investors

For more information, visit www.EvanCarmichael.com.

Reader Question - Starting A Company

Evan,

I wanted to start a small importing/exporting company buying and selling handbags and ladies accessories. Can you give me direction as to what the best steps to take are? Also if there are any resources that I can research or use to get this going?

Thanks.

Karmela




Karmela,

Congratulations on your ambition to start a business!

My top three suggestions for you are the following:

1) Model Success. Find someone who has achieved business success who you admire. Look at people in your industry as well as outside your industry. For example, who is the most successful importing / exporting company right now for handbags? What about importers / exporters for other products? Who are some other successful entrepreneurs you look up to? By studying their stories and learning how they got started you can create a model of success for your own business. For some ideas you can visit my Modeling Masters blog at http://www.evancarmichael.com/Masters/Masters.html

2) Start Small. As an entrepreneur you�re bound to have many great ideas as to where your business can go. There are always new markets to tackle, new products to sell, and new opportunities to conquer. Many entrepreneurs, however, try to take on too much too quickly. The first year of a small business is about survival � making enough to pay the bills and ensuring you�re still going to be around next year. Most entrepreneurs who act big too quickly end up going bust. Build your foundation, dream big and take small steps today for what will soon be your outstanding company!

3) Set Goals. When you have a clear sense of what you want to do with your business, you are much more likely to achieve success. If you start driving without any destination in mind then you could spend your entire time driving around in circles! Take some time and write down where you want to take your business. Make long term goals as well as short term ones � what are you going to do this week to move forward on one of your long term goals? Set your direction and take steps every day to get closer to your goals.

Good luck in building your business and keep me posted!

Evan.

For more information, visit www.EvanCarmichael.com.

Reader Question - Selling My Invention

Dear Evan,

Claudio and I have been to some of your meetings which we enjoyed, we have developed a new wheelbarrow, it is a sort of self loading, but we are unable to find some manufacturers to take on this project, we had lot of good remarks from industries, we have corrected the negative remarks, and have a new prototype, drawings, but we don't have the necessary finances, it would be an ideal find an industry maybe in China to take over and maybe sell the all thing, we have filed in USA/ Argentina/PCT. And there should be no problems with the patent as we had some actions taken, but not really important, we have addressed them. Can you please give some advice on what next?

I thank you and hope to see you again.

All the best Maria Carosi


Hi Maria,

Moving from being an inventor to being an entrepreneur can often be a very challenging step. For an inventor to be successful he or she must be focused on satisfying a human need, which is to enhance our experience by giving us useful tools.

There are a couple of options that you can take. In terms of financing, your best bet would be to speak with angel investors (wealthy individuals like doctors, dentists, lawyers, etc.). They are usually reached through informal networks - your friends and family would be a good place to start to see if they know anyone who they can introduce you to. I've also written a section on my website dedicated to finding angel investors at http://www.evancarmichael.com/Angel-Investors/index.html.

A second option is to contact the BDC (Business Development Bank of Canada). They are a government run organization with a mandate to help Canadian entrepreneurs. They are not going to automatically approve you but they do take more risks compared to the typical banks.

You should also focus on getting some more traction with potential customers. You said that you've spoken with industries and have received good remarks. Will they purchase your product up front? Will they give you a letter of intent? Will they provide testimonials?

Often customers are great financing options for startup entrepreneurs. If they won't agree to buy up front then at least you can get their support to show potential investors. If you can show an investor or lender that you have clients lined up you've done more than 90% of the other business plans they've seen this month.

A final thought you might consider is to think about if you really want to run a business or not. Many inventors like to create but do not like the work that comes with operating a company. You need to focus on what you're the best at and bring others on who can complement you.

Good luck!

Evan.

For more information, visit www.EvanCarmichael.com.

Angel Investors - An Example - The Toronto Venture Group

Investment Size: $100,000 - $2,000,000


Valuation: $200,000 - $5,000,000 pre-money

Structure:
* Series A Preferred Stock
* Typical venture capital terms and conditions
* Representation on company board of directors

Local: Strong preference to Canadian companies: 2 hour Toronto radius

Large Potential Growth: $50 M sales globally

High Anticipated Growth Rate: > 25% / year.

Experienced Management Team: proven ability to start, grow a company

Sustainable Competitive Advantage: over existing / emerging competition

Barriers To Entry: Have the means to discourage / beat competition (proprietary technology /
business method, patent, trade secret, years ahead of competition)

Commercialization Strategy: Realistic go to market plan

Proof Of Concept: Product / service that fulfills a need, has some sales, strategic partners or solid sales commitments

Business Model Anchored In Reality: Thoroughly assessed market, product development costs, operating expenses, funding requirements

For more information, visit www.EvanCarmichael.com.

Executive Summary Review - WaterWorld - Lesson #3 - The Business Model

The business model section of a plan is important because it outlines how your company will make money. The business model has to make sense, be a win for all parties involved, and be realistic.

WaterWorld's business model is to "sell directly to media executives and wholesale buyers in exchange for advertising and publicity. We give up a percentage of the sales garnered from the particular media. They in turn will distribute our products to their customers at the retail level. In many instances WaterWorld will get the orders directly and ship straight to the end user and then remit earnings to the media that generated the sale."

The typical business model for a media company such as a television station is to sell advertising � not products. They get paid based on the amount of air time you want and during which time as supposed to how successful your advertising is.

This strategy may work with smaller outlets who are having a hard time attracting enough companies to fill their advertising spots but does not lend itself well to the larger players.

Just as you need provide proof that your product works, you need to demonstrate to investors that your business model works and makes sense � especially when you're assumptions are based on activities that are outside the norm. Have media companies already agreed to this method of cooperation? Who are they? What have they said? How many more can you get and is this enough to push the product?

Reduce the risk for the investor by showing them that the business model works and is well thought out.

Would you like your Executive Summary reviewed? Click on the "Get Your Plan Reviewed" button at the top of the page.

For more information, visit www.EvanCarmichael.com.

Angel Investors - Due Diligence - Legal

Legal - Questions Angels Will Ask

Is this company a legal incorporation?

Does the company have a shareholder's agreement?

Is it sophisticated enough to prevent company infighting?

Are the holdings fairly distributed to prevent future problems?

Is there a shotgun clause?

For more information, visit www.EvanCarmichael.com.

Angel group watches for early-stage rising stars

" Delta Angel Group, a nonprofit alliance formed here three years ago to bring together early-stage, mostly technology-oriented companies with private investors, is making gains in its efforts to stimulate business growth here, says Norm Leatha, its president.

“There are not enough people who have the money doing this” type of higher-risk, higher-return investing in the Spokane area yet, nor are there as many great investment opportunities bubbling to the surface yet as he’d like to see, Leatha says.

“On the other hand,” he says, “we’re not being starved for opportunities. It’s amazing how many things are percolating in the community.” Inland Northwest universities, in particular, have started to feed a lot more business-venture ideas into the seed-money pipeline, he says.

A major catalyst for Delta “will be when we have a major success”—an angel-ignited business takeoff perhaps not on par with Microsoft or Starbucks, but substantial enough to create big economic impact here, Leatha says.

Since the group was founded, he says, proposals from 31 applicants have been presented to the group’s member investors, or about 10 a year. Data just now are being gathered on how many of the companies that have sought angel funding through Delta eventually received money—either from the group’s members or indirectly, such as from members’ friends, Leatha says. He estimates, though, that probably half of the companies that have applied got some amount of angel funding.

He declines for confidentiality reasons to name them, or identify most of Delta’s members, but says some of the recipient companies are well-known emerging ventures here, and many of Delta’s members are prominent businesspeople.

Its members’ backgrounds vary widely, he says, but “they are almost always entrepreneurs who have been successful on their own and understand how the process works, and want to give back in a way that is meaningful to where they live.”

Angel investors are wealthy people who provide capital for startups, usually in exchange for an equity stake, and look for a higher return than they would garner from more conventional investments. They often provide the first outside financing that early-stage companies receive beyond what they can raise from family members or friends while they’re still too immature to seek financing from venture firms or financial institutions.

The use of the term “angel” in this context comes, according to Web sources, from the practice in the early 1900s of affluent businesspeople investing in Broadway productions. These days, angels provide to the enterprises they help finance not only seed funding, but also business guidance, management expertise, and contacts.

Unlike venture capitalists, they normally don’t pool money in professionally managed funds. However, they often organize themselves in angel networks or groups to learn more about how to invest, discover new investment opportunities, to share research, and to pool investment capital to varying degrees."

For more information, visit www.EvanCarmichael.com.

Executive Summary Review - WaterWorld - Lesson #2 - Have You Done It Before?

One of the most important factors that investors look at is the management team. Has the president done it before and does he or she have the team to make the company successful or not?

Investors would rather put their money behind an average business plan with an outstanding president than an outstanding business plan with an average president.

In the WaterWorld summary the reader learns that president Mark Hall has various university degrees and is a small business lawyer from Minnesota. It also states that he "has helped start several small businesses for other entrepreneurs." What are these businesses? How was he involved? Did they turn into successful businesses? These are much more important areas to focus on than the university degrees.

The plan also states "We have several trusted and reliable persons who will assume positions in the company, after funding, that will significantly enhance our ability to serve the public, media executives and wholesale buyers through their years of industry experience." Who are these individuals? Why are they interested and what will their roles be?

Again, the investor is looking to maximize opportunity and minimize risk. This is done by betting on someone who has done it before. Whatever experience you do have running a business and being successful, leverage it in your plan. Investors care much more about your previous experience than your educational background.

If you don't have all the experience yourself, bring in a team and make sure to mention who they are and what their backgrounds are. Even having a reputable and experienced board of advisors can sometimes make the difference between getting funded or not.

Next - Lesson #3 - The Business Model

Would you like your Executive Summary reviewed? Click on the "Get Your Plan Reviewed" button at the top of the page.

For more information, visit www.EvanCarmichael.com.

Angel Investors - Due Diligence - Financials

Do I understand the assumptions behind the projections and do they make sense?

Is the infrastructure in place for growth?

Is the company valuation reasonable?

What is the sales pipline and cycle?

What are the use of proceeds?

Will I make 30-40% ROI per year?

Will I be able to exit is 5 to 8 years?

For more information, visit www.EvanCarmichael.com.

Angel Investors - Due Diligence - Sales

Sales - Questions Angels Will Ask

Is the President a technologist or a business person who can make sales?

Are the projections realistic?

Do the sales channels and plan of attack make sense?

Has anyone on this management team sold to this industry before?

For more information, visit www.EvanCarmichael.com.

Executive Summary Review - WaterWorld - Lesson #1 - Does It Work?

The summary provides the reader with information on what the benefits of the drinks are. For example, the company claims that the Victory drink can restore energy lost through exercise, training, and game time exertion, allow the heart muscles to withstand vigorous and strenuous exercise, fight and prevents lactic acid build-up, reduce and eliminate cramping, and boost energy reserves and accelerates muscle recovery time.

What is missing is the proof that it works. You need to demonstrate to potential investors that what you have is real. Show test studies, include testimonials, provide lab reports, have supporting quotes from respected individuals in your market. In other words "Show me the money!"

The problem is, while your product is probably excellent and can deliver on all the promises you are making, you need to remember that most of the other companies seeking capital out there are not marketing such reliable products. Unless you demonstrate that the product actually works then you are immediately lumped in with all the other "junk" business plans.

Investors see so many business plans every day that they are looking for reasons to say no. Don't make it easy for them to turn you down by not having supporting evidence for your claims.

Next - Lesson #2 - Have You Done It Before?

Would you like your Executive Summary reviewed? Click on the "Get Your Plan Reviewed" button at the top of the page.

For more information, visit www.EvanCarmichael.com.

Executive Summary Review - WaterWorld - Highlights - A Ready Market

What's good about this company is that it is attacking a ready market. Many companies seeking capital can only really be successful when a new technological breakthrough has been made, government approval has been granted, or an entirely new market has been developed.

This increases the risk for the investor as there is uncertainty if the necessary changes will occur or not. Before making a decision, investors will weigh the opportunity of putting money into a company against the risk of losing it all. Most entrepreneurs do their best to show the opportunity of investing in their company but do not focus any energy on demonstrating how the investor's risk will be minimized and money will be safe.

The markets that WaterWorld is targeting are existing, multi billion dollar industries which are looking for new, innovating products to solve their pain.

Next - Lesson #1 - Does It Work?

Would you like your Executive Summary reviewed? Click on the "Get Your Plan Reviewed" button at the top of the page.

For more information, visit www.EvanCarmichael.com.

Angel Investors - Due Diligence - Product

Product - Questions Angels Will Ask

Is there a proven demand for your product?

Does the product actually work or is it just a theory? Is there a case study example?

How does the product differentiate from its competitors?

Is there any proprietary protection on the product?

Do I understand how this product works?

For more information, visit www.EvanCarmichael.com.

Executive Summary Review - WaterWorld - Overview

WaterWorld Enhanced Drinking Water (http://www.waterworldedw.com) is a manufacturer of energy drinks and spring water. The company has three functional energy drinks as part of its Peak Performance line of products. The three drinks are:

Amore', a sexual enhancement beverage with a natural aphrodisiac with a cherry/grape flavor that keeps him up and her feeling flush with a gentle warm feeling.

Trucker's Fuel, a tea flavor with a mild lemon twist drink for those who drive for a living or need to stay awake during a long day or need to study all night.

Victory, a lemon tasting beverage that can greatly reduce muscle fatigue, joint soreness, cramping, energy loss, and will speed energy recovery and increase energy reserves.

The company is in the startup phase and is run by Mark Hall, a Minnesota based small business lawyer. It is projecting to break even 6-12 months after funding and is searching for $1-4 million in capital at a $10 million valuation.

Next - Highlights - A Ready Market

Would you like your Executive Summary reviewed? Click on the "Get Your Plan Reviewed" button at the top of the page.

For more information, visit www.EvanCarmichael.com.

Angel Investors - Due Diligence - People

People - Questions Angels Will Ask

Do we share the same values?

Can we work together?

Does the management team have accomplishments and a reputation in their industry?

Does the team have a history of running successful businesses and returning value to investors?

Are the key people in place? Are their any gaps?

Are the founding members still involved? How so?

How do I get along with the entire management team and not just the President?

For more information, visit www.EvanCarmichael.com.

Angel investors turn to Web to find promising startups

"Now, entrepreneurs can shop for money online.

Organizers of a local angel investor group have launched a Web site (www.midamericaangels.com) that startups can use to submit business plans to its wealthy members.

The site is part of an aggressive start for Mid-America Angels, which the CEOs of the Enterprise Center of Johnson County and the Lawrence Regional Technology Center formed in early December.

Lawrence Regional Technology Center CEO Matthew McClorey said that 23 wealthy individuals have signed up to be members of Mid-America Angels. He said the group should have 25 members by its March 28 quarterly meeting.

"There's a lot of verbal commitments out there," McClorey said.

Mid-America Angels investors will look to provide seed money to technology and life sciences ventures. The goal is that the group will be available to provide small investments -- from $200,000 to $2 million -- to help launch high-quality companies in the region. Venture capitalists largely have retreated from financing rank startups.

So far, the organizers said they are seeing pent-up demand."

For more information, visit www.EvanCarmichael.com.

Reader Question - Finding Investment Capital

Good evening, my name is Chris and I am looking for some information on angel investment or venture capital for a future investment. I am looking at purchasing a bar/restaurant in Dutch St Maarten. The business is already up and running and has been very sucessful for a many number of years. The business is being sold well below market value and is not currently on the market. I am looking at moving on this business very quickly because once it hits the market it will not be on there very long. I am a little bit shy on the total investment which is why I am contacting you. Any information you have would be of great help. And if you are unable to help, any information you have on anyone who would help would be greatly appreciated.

Thanks for your help.

Chris


Hi Chris,

There are a number of ways to valuate a business. The model we typically use is discounted cash flow (DCF). In DCF, you take an estimate of the company's future earnings and discount it back to today to get the present value. Investors will often add a risk premium as well as a premium for being a private company.

The restaurant business is not one that lends itself to venture capitalists very well. VCs are looking for an average return of 30% per year which is hard to create in restaurants unless you are planning very serious expansion.

It could be of interest to the right angel investor. You would have to show what their return on investment would be and how quickly they will be able to recoup their investment. Other elements to keep in mind are how they might be able to exit the investment and how involved do you want them to be in the management of your business. For a more complete guide on Angel Investors visit: http://www.evancarmichael.com/Angel-Investors/index.html

If the business has been successful for a number of years they should have a healthy balance sheet and historical financials. This could lend itself to a leveraged buyout situation where you finance the acquisition through a heavy debt load. The cash flow would obviously have to be enough to cover your debt payments. You can discuss this with your bank as well as work with private firms provided that the numbers make sense.

Good luck!

Evan.

For more information, visit www.EvanCarmichael.com.

Angel Investors - Due Diligence

Due diligence is the process of researching an opportunity to come to a decision whether an investment should be made or not. There are typically 5 key areas that angel investors will look at in their due diligence: People, Product, Sales, Financials, Legal.

For more information, visit www.EvanCarmichael.com.

Master industry basics before seeking money

"

Q: I've been on a journey for eight years and have plans to launch an activewear line in every sport that features a round ball -- golf, tennis, soccer, etc. Could you PLEASE direct me to financial institutions that would lend my company $500,000 if I had an accounts receivable from a major retailer agreeing to buy $300,000 worth of goods? I'm desperate to get going.

R. Cage, Jacksonville, Fla.

A: I hear your urgency! I'm sure all startup entrepreneurs can sympathize with your frustration. You're eager to get in the game, but don't yet have all the gear in hand to play ball.

Coaches often take the time to teach emerging athletes the broader aspects of a sport to give them tactical advantage. Similarly, my answer to you will focus on the background rules of financing "soft goods."

Let's start with some terminology. Accounts receivable relates to the invoice value of goods that have already been shipped from a warehouse. A purchase order is a written request to buy goods for immediate shipment, or as is often the case in the garment industry, some specified date.

Which is more valuable? Clearly the accounts receivable, because it represents more reliable cash value to prospective financial partners. Unfortunately many first-time entrepreneurs learn quickly that large retailers often cancel or change purchase orders based on their current retail needs. For this reason, financial institutions don't typically finance retail purchase orders. They also turn away opportunities to finance finished soft goods inventory because of the risk of fast "inventory obsolescence" -- a fancy phrase that means unwanted, out-of-style garments with little or no salable value.

Here's a little more background information. Commercial lenders that finance accounts receivable will cherry-pick your customers that preferably pay in less than 45 days and have strong credit ratings. Lenders call these customers "good credits" or "eligible receivables.""

For more information, visit www.EvanCarmichael.com.

Executive Summary Review - Howling Moon Designs - Lesson #3 - Get A Management Team

One of the most important rules for venture capital investors is make sure the company has a solid management team. Investing in early stage companies is as much about the team as it is about the idea, if not more. Venture capitalists want to see that you have some experience and that you have competent people around you.

Howling Moon Designs lays out an organization structure and identifies the team members they will need to make the project a success, but at the moment the company has only one person.

In the plan it is also unclear as to what the founder�s previous experience has been and what other companies he has helped to success.

A venture capitalist is unlikely to invest in a company with one person and a limited track record.

You need to build a team around you with complementary skills. If you do not have much experience in running companies then build a board of advisors with people who have. You want to show as much as possible that you have the existing personnel in place already to make this business a success.

Would you like your Executive Summary reviewed? Click on the "Get Your Plan Reviewed" button at the top of the page.

For more information, visit www.EvanCarmichael.com.

Angel Investors - What They Look For

They have related experience and industry contacts.

You have a good story, honesty, and a passion for the business.

They want to live vicariously through you / relive past glory.

They like you and want to help.

You are a close distance from them (in the same city).

You have a solid business plan.

For more information, visit www.EvanCarmichael.com.

Venture capital up in ’05

"Venture capital investments in metropolitan area businesses rose slightly in the fourth quarter of 2005, with financial services companies leading the way, according to a survey released yesterday.

A total of $287 million was invested in metropolitan area companies in the last three months of 2005, up from $283 million in the third quarter, according to the quarterly MoneyTreeSurvey, conducted by PricewaterhouseCoopers, Thomson Venture Economics and the National Venture Capital Association.

Only one Long Island company received venture financing in the fourth quarter. All Metro Health Care Services Inc. of Lynbrook, which provides nurses and other home-health care aides to patients, received $3 million for an expansion, the survey said. Company officials did not return phone calls seeking comment.

For all of 2005, five Long Island companies received investments.

Robert Sturm, managing partner for PricewaterhouseCoopers' Long Island technology practice, said fourth-quarter results were encouraging, given the drop in venture financing in the metropolitan area after the tech bubble burst in 2001.

"One quarter doesn't mean a whole lot," Sturm said. "But what we saw through 2005 was the stabilization of investment and the beginnings of increased investment.""

For more information, visit www.EvanCarmichael.com.

Executive Summary Review - Howling Moon Designs - Lesson #2 - Very Early Stage

The further along a company has gone towards generating real revenues and income, the easier it is to attract capital.

Howling Moon Designs has yet to deliver a prototype and is asking for enough money for the 3-4 years it will take to build the game.

Unless you've make a lot of money for investors doing it before or have a big customer lined up, investors are highly unlikely to risk a large amount of money for 3-4 years of development work.

Investors would rather finance marketing and expansion instead of research and development. You need to show as much as possible how the money will go towards sales and marketing and crunch down on your research and development timeline. There aren�t that many venture capitalists who are interested in funding ideas anymore.

Next - Lesson #3 - Get A Management Team

Would you like your Executive Summary reviewed? Click on the "Get Your Plan Reviewed" button at the top of the page.

For more information, visit www.EvanCarmichael.com.

Angel Investors - Investment Amounts

Averages between $50,000 and $250,000.

Below $50,000 is usually "love money" - friends and family.

Above $250,000 is usually groups of angel investors or venture capitalists.

They typically see themselves as a stepping stone to further financing.

Their due diligence is usually between 6 and 8 weeks.

Angels see an average of 8 to 10 potential investments per year.

They will make between 2 and 3 investments per year.

The Rule of 10 is that for every 10 investments an angel makes, 2 or 3 will be successful, 3 or 4 will fail, and the rest will struggle along.

For more information, visit www.EvanCarmichael.com.

Executive Summary Review - Howling Moon Designs - Lesson #1 - How Are You Different?

You have to be different to attract investment dollars. A common question venture capitalists will ask is "what is your unfair competitive advantage?" They want to see not only that you have an edge over your competitors but that it's such a big advantage that it's almost unfair.

The description of Destiny Online sounds extremely similar to that of Project Entropia, the leading competing game in this market. The competitive advantages listed are:

"The character you create will allow the player to have the ability for full customization. We will gain the rights of a high quality engine to use for the game. Inside the game world we are able to show over 15 different revenue streams that allow us to make money. The game world will always be changing and offer main new areas for the players. As well the partnership with Vognesvit helps provides us with an engine and a well experienced team."

One of the main benefits of Project Entropia is that players can create a truly unique character through an intuitive user interface. In addition, Project Entropia does offer a number of revenue streams for its players. I'm left unclear as to how this game will be excitingly different.

You will always be compared to the gorilla in the market � the company that is leading the industry. You need to make sure that you clearly differentiate yourself from your competition. A simple table which highlights the different characteristics is usually a great visual to include in your plan.

Next - Lesson #2 - Very Early Stage

Would you like your Executive Summary reviewed? Click on the "Get Your Plan Reviewed" button at the top of the page.

For more information, visit www.EvanCarmichael.com.

Angel Investors - Who Are They

Bridge the love money / venture capital funding gap.

Can provide both money and management expertise.

Invest in 60% of startup companies.

Invest 5 times more money than venture capitalists.

Are successful entrepreneurs and professionals.

Have an average annual income of $100-250k.

Work through informal networks of business associates and professionals (lawyers, accountants, brokers)

Are known for being private, independent and even reclusive.

For more information, visit www.EvanCarmichael.com.

Executive Summary Review - Howling Moon Designs - Highlights - A Growth Market

Online gaming is big business and while the online gaming market for PCs is expected to drop over the coming years, one exciting and rapidly growing area is Massive Multiplayer Online Role Playing Gaming.

According to Wikipedia, "a massively (or massive) multiplayer online role-playing game or MMORPG is a multiplayer computer role-playing game that enables thousands of players to play in an evolving virtual world at the same time over the Internet. MMORPGs are a specific type of massively multiplayer online game (MMOG)." An estimated 20 million people worldwide are spending time in massively multiplayer online role-playing games.

Project Entropia (http://www.project-entropia.com/) is a popular MMORPG where players can construct buildings, create businesses and make investments to build their in-game wealth, which they can then cash out back into hard currency. The projected GNP for the Project Entropia universe in 2005 is 1.5 billion PED, or US$150 million.

This is definitely a growth market and, while still very early stage, could be a big money-maker for savvy investors.

Next - Lesson #1 - How Are You Different?

Would you like your Executive Summary reviewed? Click on the "Get Your Plan Reviewed" button at the top of the page.

For more information, visit www.EvanCarmichael.com.

Why Banks Say No

Finally, according to a CFIB survey of entrepreneurs who have applied for bank loans, here are the most common reasons the banks give them for why their application was rejected:
� 26.6%: Too much outstanding debt
� 26.6%: Lack of owner equity
� 24.8%: Insufficient cash flow
� 17.2%: Too new in business
� 13.7%: Poor industry conditions
� 11.6%: No reasons were given
� 7.8%: Products not considered profitable
� 4.1%: Inadequate business plan
� 4.0%: Environmental risk factors

These are the major warning signs that bankers will look out for before approving your loan. Before submitting your application you must try as hard as you can do anticipate and counter possible arguments in each of these areas.

One disturbing fact is that over 11% of entrepreneurs who get their loan applications rejected are not given a reason from the banks as to why this happened. The most important thing you can do if you get rejected is to listen to your banker. Always find out the reasons why you got turned down. Then ask what you can do over the next couple of weeks or months to improve your business so that they will accept your application.

Working with banks is not always an easy thing for entrepreneurs to do. They are, however, going to be important to the growth and success of

For more information, visit www.EvanCarmichael.com.

Angel tax credit idea picks up local investor support

" Advocates of Oregon's angel investing community say they'll pursue tax credits that would reward spenders who furnish seed money to freshly minted companies.

The Oregon Innovation Council is exploring how much of a tax credit to seek, what lobbying strategies it can deploy to convince legislators that credits are needed and whether the provision should expire after a certain period.

The tactic offers an early hint that, as the state continues its financial recovery, economic issues will again play a key role in the state's upcoming legislative agenda.

"This could certainly help bring people back off the sidelines who were either burned or scared off by the dotcom implosion," said Wayne Embree, managing partner of Portland-based Cascadia Partners and chairman of an OIC subcommittee charged with finding new capital sources for startup companies.

Nineteen states offer some sort of tax credit to angel investors. In Wisconsin, the ploy is credited with generating $15.5 million worth of investments in its first year.

Legislators in New Mexico are considering adding tax credits that would allot a 25 percent tax credit, capped at $25,000 per investment and at three deals per year, to angels. The state's leaders had rejected a similar measure last year calling for a 5 percent tax credit.

New Mexico's program would have an overall cap of $750,000, and be only available to investors deemed as qualified by the Securities and Exchange Commission.

Embree said the Oregon investment advocates have yet to devise details of their 2007 proposal.

Angel investments usually range between $25,000 and $100,000. Oregon's angel community held its biggest event, the Oregon Entrepreneurs Forum's Angel Oregon presentation contests, in February.

The Oregon Innovation Council, charged with enhancing investment opportunities among other goals, includes two key state-level players: State Treasurer Randall Edwards and State Sen. Ryan Deckert, D-Beaverton, who chaired the Senate's Revenue Committee last session.

The efforts come on the heels of a successful Angel Oregon event. Four finalists competed for the event's top prize; while Eugene-based MitoSciences won the $150,000 award, all finalist companies are expected to receive angel funding."

For more information, visit www.EvanCarmichael.com.

Executive Summary Review - Howling Moon Designs - Overview

Howling Moon Designs is a gaming company proposing to create a Massive Multiplayer Online Role Playing Game (MMORPG), Destiny Online. Destiny Online will be a real world economic system that allows players to get jobs in the game, open stores, enter tournaments, sell items on a website, go on quests, and be part of teams.

The company is in the startup phase and projects that the game will take 3 to 4 years to complete. It is run by Lee Ing from Ontario.

Next - Highlights - A Growth Market

Would you like your Executive Summary reviewed? Click on the "Get Your Plan Reviewed" button at the top of the page.

For more information, visit www.EvanCarmichael.com.

Who Makes The Decisions

When applying for a loan it is also important to know who is going to be making the final decision as to whether you get accepted or rejected.

According to recent CFIB data, the decision maker breakdown looks like this:
� 36% of decisions are made by the head or regional offices
� 31% of decisions are unknown who the final decision maker is
� 25% of decisions are made by the local branch office
� 8% of decisions are made by automated credit scoring models

What is interesting to note is that most of the decisions are still made by real people, not computers. And people make emotional decisions, not always rational ones. By presenting your case and letting the decision maker get to know you and your story, you can increase the chance that they will say yes.

For more information, visit www.EvanCarmichael.com.

55 advance in business plan contest

"Fifty-five fledgeling companies and ideas passed muster in the first round of the Governor's Business Plan Contest, organizers said on Wednesday.

They were chosen from 188 submissions by a panel of judges based on brief summaries of their businesses and represent various municipalities, with concentrations in the Madison and Milwaukee areas.

That's down from 200 entries last year and 330 in 2004, the first contest. But Mark Bugher, chairman of the Wisconsin Technology Council, which runs the contest, said the quality of the entries has increased."

For more information, visit www.EvanCarmichael.com.

Reader Question - Do I Need To Be Charismatic?

Hi Evan,
I have recently discovered your website and browsing the various resources that your site offers. I appreciate them very much. I am a fresh graduate from UBC in Applied Science, Electrical Engineering. I started working at Canada's number 2 telecommunications provider shortly after my graduation from UBC. I have searched within the organization to examine the leadership qualities exhibited by the company's executive leadership team. I have come to realize that leadership is based on very simple ideas.

I feel that I have the ideas and the intelligence (don't we all) to create and grow leading businesses. One quality that I feel I lack is charisma. I am not awkward, but I am not a salesman. In your experience, does someone like myself have the potential to grown that charismatic personality, or should I focus my career on developing my stronger traits, such as my analytical and creative abilities? If I will always be someone who lacks the charisma to charm all my audiences, should I give up the idea of being the CEO of leading edge companies, and focus on other roles, or do you think I could still fill such a role successfully?

Again, I would like to thank you for the resources that you have made available. I have a couple of business opportunities awaiting me, and I am in the due diligence stage of one of them. Because of the generosity of your site and the relationship it has built, I will openly look for ways that I can employ your services. Can you tell that I have been reading some of your Marketing advice from Michael Hepworth?

Sincerely,

Matthew


Hi Matthew,

The key is to know what you're good at and find a way to make money doing it. I've met a lot of entrepreneurs who have built multi-million dollar companies who are not very charismatic at all.

By the same token, I've made many charismatic people who have failed miserably at being an entrepreneur.

What you need to do is pick an industry that you are passionate about and you can be outstanding in.

Every company needs a team of people to be successful. The first step in building this team is recognizing what your individual weaknesses are. Surround yourself with people who complement your skills and can help you build a world class organization.

Good luck!

Evan.

For more information, visit www.EvanCarmichael.com.

Business Banking Services

Let's say you run a website design company. You have two clients. One client uses your services on a regular basis. Every month she comes to you with a plan to update her site and she sees you as a trusted business partner. The other client had you set up her site but you have not heard from her for six months for any improvements or updates. She sees you as a necessary evil to getting her business going and wants to deal with you only when she absolutely has to. Now, say both clients come to you and want site changes but neither can pay up front. They want you to credit their account and they offer to pay you in a couple of months. Assuming you could only grant the credit to one person, who would it be?

The answer is obviously the first client who uses you on a regular basis and sees you as a trusted business partner.

Banks work the same way. The more you use their business services and the more you are in contact with them, the more they get to know you, the more they want to keep you as a client, and the more likely they will give accept your loan application over other businesses, with all else being equal.

Develop this relationship by setting up all of your accounts with one bank. Use them for your checking account, your savings account, your credit cards, your
Loans and lines of credit, and every other business banking service you end up using. When you sit down with your account manager for your loan application and she pulls up your account history on her computer, you want her to be thinking "Wow. This client is really using a lot of our services. I want to do as much as I can to make sure I can keep her at our bank."

For more information, visit www.EvanCarmichael.com.

Reader Question - Starting A Company

Evan,

I wanted to start a small importing/exporting company buying and selling handbags and ladies accessories. Can you give me direction as to what the best steps to take are? Also if there are any resources that I can research or use to get this going?

Thanks.

Karmela




Karmela,

Congratulations on your ambition to start a business!

My top three suggestions for you are the following:

1) Model Success. Find someone who has achieved business success who you admire. Look at people in your industry as well as outside your industry. For example, who is the most successful importing / exporting company right now for handbags? What about importers / exporters for other products? Who are some other successful entrepreneurs you look up to? By studying their stories and learning how they got started you can create a model of success for your own business. For some ideas you can visit my Modeling Masters blog at http://www.evancarmichael.com/Masters/Masters.html

2) Start Small. As an entrepreneur you�re bound to have many great ideas as to where your business can go. There are always new markets to tackle, new products to sell, and new opportunities to conquer. Many entrepreneurs, however, try to take on too much too quickly. The first year of a small business is about survival � making enough to pay the bills and ensuring you�re still going to be around next year. Most entrepreneurs who act big too quickly end up going bust. Build your foundation, dream big and take small steps today for what will soon be your outstanding company!

3) Set Goals. When you have a clear sense of what you want to do with your business, you are much more likely to achieve success. If you start driving without any destination in mind then you could spend your entire time driving around in circles! Take some time and write down where you want to take your business. Make long term goals as well as short term ones � what are you going to do this week to move forward on one of your long term goals? Set your direction and take steps every day to get closer to your goals.

Good luck in building your business and keep me posted!

Evan.

For more information, visit www.EvanCarmichael.com.

Reader Question - Starting A Company

Evan,

I wanted to start a small importing/exporting company buying and selling handbags and ladies accessories. Can you give me direction as to what the best steps to take are? Also if there are any resources that I can research or use to get this going?

Thanks.

Karmela




Karmela,

Congratulations on your ambition to start a business!

My top three suggestions for you are the following:

1) Model Success. Find someone who has achieved business success who you admire. Look at people in your industry as well as outside your industry. For example, who is the most successful importing / exporting company right now for handbags? What about importers / exporters for other products? Who are some other successful entrepreneurs you look up to? By studying their stories and learning how they got started you can create a model of success for your own business. For some ideas you can visit my Modeling Masters blog at http://www.evancarmichael.com/Masters/Masters.html

2) Start Small. As an entrepreneur you?re bound to have many great ideas as to where your business can go. There are always new markets to tackle, new products to sell, and new opportunities to conquer. Many entrepreneurs, however, try to take on too much too quickly. The first year of a small business is about survival ? making enough to pay the bills and ensuring you?re still going to be around next year. Most entrepreneurs who act big too quickly end up going bust. Build your foundation, dream big and take small steps today for what will soon be your outstanding company!

3) Set Goals. When you have a clear sense of what you want to do with your business, you are much more likely to achieve success. If you start driving without any destination in mind then you could spend your entire time driving around in circles! Take some time and write down where you want to take your business. Make long term goals as well as short term ones ? what are you going to do this week to move forward on one of your long term goals? Set your direction and take steps every day to get closer to your goals.

Good luck in building your business and keep me posted!

Evan.

For more information, visit www.EvanCarmichael.com.

Reader Question - Selling My Invention

Dear Evan,

Claudio and I have been to some of your meetings which we enjoyed, we have developed a new wheelbarrow, it is a sort of self loading, but we are unable to find some manufacturers to take on this project, we had lot of good remarks from industries, we have corrected the negative remarks, and have a new prototype, drawings, but we don't have the necessary finances, it would be an ideal find an industry maybe in China to take over and maybe sell the all thing, we have filed in USA/ Argentina/PCT. And there should be no problems with the patent as we had some actions taken, but not really important, we have addressed them. Can you please give some advice on what next?

I thank you and hope to see you again.

All the best Maria Carosi


Hi Maria,

Moving from being an inventor to being an entrepreneur can often be a very challenging step. For an inventor to be successful he or she must be focused on satisfying a human need, which is to enhance our experience by giving us useful tools.

There are a couple of options that you can take. In terms of financing, your best bet would be to speak with angel investors (wealthy individuals like doctors, dentists, lawyers, etc.). They are usually reached through informal networks - your friends and family would be a good place to start to see if they know anyone who they can introduce you to. I've also written a section on my website dedicated to finding angel investors at http://www.evancarmichael.com/Angel-Investors/index.html.

A second option is to contact the BDC (Business Development Bank of Canada). They are a government run organization with a mandate to help Canadian entrepreneurs. They are not going to automatically approve you but they do take more risks compared to the typical banks.

You should also focus on getting some more traction with potential customers. You said that you've spoken with industries and have received good remarks. Will they purchase your product up front? Will they give you a letter of intent? Will they provide testimonials?

Often customers are great financing options for startup entrepreneurs. If they won't agree to buy up front then at least you can get their support to show potential investors. If you can show an investor or lender that you have clients lined up you've done more than 90% of the other business plans they've seen this month.

A final thought you might consider is to think about if you really want to run a business or not. Many inventors like to create but do not like the work that comes with operating a company. You need to focus on what you're the best at and bring others on who can complement you.

Good luck!

Evan.

For more information, visit www.EvanCarmichael.com.

Reader Question - Selling My Invention

Dear Evan,

Claudio and I have been to some of your meetings which we enjoyed, we have developed a new wheelbarrow, it is a sort of self loading, but we are unable to find some manufacturers to take on this project, we had lot of good remarks from industries, we have corrected the negative remarks, and have a new prototype, drawings, but we don't have the necessary finances, it would be an ideal find an industry maybe in China to take over and maybe sell the all thing, we have filed in USA/ Argentina/PCT. And there should be no problems with the patent as we had some actions taken, but not really important, we have addressed them. Can you please give some advice on what next?

I thank you and hope to see you again.

All the best Maria Carosi


Hi Maria,

Moving from being an inventor to being an entrepreneur can often be a very challenging step. For an inventor to be successful he or she must be focused on satisfying a human need, which is to enhance our experience by giving us useful tools.

There are a couple of options that you can take. In terms of financing, your best bet would be to speak with angel investors (wealthy individuals like doctors, dentists, lawyers, etc.). They are usually reached through informal networks - your friends and family would be a good place to start to see if they know anyone who they can introduce you to. I've also written a section on my website dedicated to finding angel investors at http://www.evancarmichael.com/Angel-Investors/index.html.

A second option is to contact the BDC (Business Development Bank of Canada). They are a government run organization with a mandate to help Canadian entrepreneurs. They are not going to automatically approve you but they do take more risks compared to the typical banks.

You should also focus on getting some more traction with potential customers. You said that you've spoken with industries and have received good remarks. Will they purchase your product up front? Will they give you a letter of intent? Will they provide testimonials?

Often customers are great financing options for startup entrepreneurs. If they won't agree to buy up front then at least you can get their support to show potential investors. If you can show an investor or lender that you have clients lined up you've done more than 90% of the other business plans they've seen this month.

A final thought you might consider is to think about if you really want to run a business or not. Many inventors like to create but do not like the work that comes with operating a company. You need to focus on what you're the best at and bring others on who can complement you.

Good luck!

Evan.

For more information, visit www.EvanCarmichael.com.

Executive Summary Review - WaterWorld - Lesson #3 - The Business Model

The business model section of a plan is important because it outlines how your company will make money. The business model has to make sense, be a win for all parties involved, and be realistic.

WaterWorld's business model is to "sell directly to media executives and wholesale buyers in exchange for advertising and publicity. We give up a percentage of the sales garnered from the particular media. They in turn will distribute our products to their customers at the retail level. In many instances WaterWorld will get the orders directly and ship straight to the end user and then remit earnings to the media that generated the sale."

The typical business model for a media company such as a television station is to sell advertising � not products. They get paid based on the amount of air time you want and during which time as supposed to how successful your advertising is.

This strategy may work with smaller outlets who are having a hard time attracting enough companies to fill their advertising spots but does not lend itself well to the larger players.

Just as you need provide proof that your product works, you need to demonstrate to investors that your business model works and makes sense � especially when you're assumptions are based on activities that are outside the norm. Have media companies already agreed to this method of cooperation? Who are they? What have they said? How many more can you get and is this enough to push the product?

Reduce the risk for the investor by showing them that the business model works and is well thought out.

Would you like your Executive Summary reviewed? Click on the "Get Your Plan Reviewed" button at the top of the page.

For more information, visit www.EvanCarmichael.com.

Executive Summary Review - WaterWorld - Lesson #3 - The Business Model

The business model section of a plan is important because it outlines how your company will make money. The business model has to make sense, be a win for all parties involved, and be realistic.

WaterWorld's business model is to "sell directly to media executives and wholesale buyers in exchange for advertising and publicity. We give up a percentage of the sales garnered from the particular media. They in turn will distribute our products to their customers at the retail level. In many instances WaterWorld will get the orders directly and ship straight to the end user and then remit earnings to the media that generated the sale."

The typical business model for a media company such as a television station is to sell advertising ? not products. They get paid based on the amount of air time you want and during which time as supposed to how successful your advertising is.

This strategy may work with smaller outlets who are having a hard time attracting enough companies to fill their advertising spots but does not lend itself well to the larger players.

Just as you need provide proof that your product works, you need to demonstrate to investors that your business model works and makes sense ? especially when you're assumptions are based on activities that are outside the norm. Have media companies already agreed to this method of cooperation? Who are they? What have they said? How many more can you get and is this enough to push the product?

Reduce the risk for the investor by showing them that the business model works and is well thought out.

Would you like your Executive Summary reviewed? Click on the "Get Your Plan Reviewed" button at the top of the page.

For more information, visit www.EvanCarmichael.com.

Executive Summary Review - WaterWorld - Lesson #2 - Have You Done It Before?

One of the most important factors that investors look at is the management team. Has the president done it before and does he or she have the team to make the company successful or not?

Investors would rather put their money behind an average business plan with an outstanding president than an outstanding business plan with an average president.

In the WaterWorld summary the reader learns that president Mark Hall has various university degrees and is a small business lawyer from Minnesota. It also states that he "has helped start several small businesses for other entrepreneurs." What are these businesses? How was he involved? Did they turn into successful businesses? These are much more important areas to focus on than the university degrees.

The plan also states "We have several trusted and reliable persons who will assume positions in the company, after funding, that will significantly enhance our ability to serve the public, media executives and wholesale buyers through their years of industry experience." Who are these individuals? Why are they interested and what will their roles be?

Again, the investor is looking to maximize opportunity and minimize risk. This is done by betting on someone who has done it before. Whatever experience you do have running a business and being successful, leverage it in your plan. Investors care much more about your previous experience than your educational background.

If you don't have all the experience yourself, bring in a team and make sure to mention who they are and what their backgrounds are. Even having a reputable and experienced board of advisors can sometimes make the difference between getting funded or not.

Next - Lesson #3 - The Business Model

Would you like your Executive Summary reviewed? Click on the "Get Your Plan Reviewed" button at the top of the page.

For more information, visit www.EvanCarmichael.com.

Executive Summary Review - WaterWorld - Lesson #2 - Have You Done It Before?

One of the most important factors that investors look at is the management team. Has the president done it before and does he or she have the team to make the company successful or not?

Investors would rather put their money behind an average business plan with an outstanding president than an outstanding business plan with an average president.

In the WaterWorld summary the reader learns that president Mark Hall has various university degrees and is a small business lawyer from Minnesota. It also states that he "has helped start several small businesses for other entrepreneurs." What are these businesses? How was he involved? Did they turn into successful businesses? These are much more important areas to focus on than the university degrees.

The plan also states "We have several trusted and reliable persons who will assume positions in the company, after funding, that will significantly enhance our ability to serve the public, media executives and wholesale buyers through their years of industry experience." Who are these individuals? Why are they interested and what will their roles be?

Again, the investor is looking to maximize opportunity and minimize risk. This is done by betting on someone who has done it before. Whatever experience you do have running a business and being successful, leverage it in your plan. Investors care much more about your previous experience than your educational background.

If you don't have all the experience yourself, bring in a team and make sure to mention who they are and what their backgrounds are. Even having a reputable and experienced board of advisors can sometimes make the difference between getting funded or not.

Next - Lesson #3 - The Business Model

Would you like your Executive Summary reviewed? Click on the "Get Your Plan Reviewed" button at the top of the page.

For more information, visit www.EvanCarmichael.com.

THE BRAZEN CAREERIST- Seek angels: One might help you wing it

"

It might shock you to hear that it's easier to find money to fund your business idea than it is to find an idea. A good idea, that is.

There are two kinds of good ideas. The first one is for a small business that will merely sustain the lifestyle you seek. Opening a gift shop on a Hawaiian beach, for example. The second is one that will be big-- big enough to grow into a big player or that you can sell to a big player.

Many people assume startup money is hard to get, but it's not. So don't be shy about moving forward with an idea.

The fastest source for money when you have no money is, of course, your credit card. Almost 40 percent of small businesses owners started their company with credit cards. If you can get one of those 0 percent-interest offers, the credit card option starts looking particularly good. But if you lose the money, it's your money. So don't use credit if you can't afford to pay it back.

Angel investors are constantly looking to invest in companies that will grow big. A good place to find angels is online, looking for people who invest in early-stage companies in your market.

The important issues will be finding someone smart and experienced who can help you take the company to the next stage. In exchange for giving up a percentage of the ownership, you should get solid mentoring as well as money. The network and advice that an angel offers is what separates the amazing ones from the mediocre.

If your business will not be big, then your pool of angels is pretty much limited to people who know you well and want to do you a favor. But there are ways you can structure a deal so that your friends and family feel like it's a decent investment.

First, offer to pay an interest rate a little higher than a bank would pay. If that doesn't work, offer to give equity in the company. Paying a percentage of profits is very cumbersome since you'll likely have to produce detailed financial statements. So make that an offer of last resort."

For more information, visit www.EvanCarmichael.com.

Executive Summary Review - WaterWorld - Lesson #1 - Does It Work?

The summary provides the reader with information on what the benefits of the drinks are. For example, the company claims that the Victory drink can restore energy lost through exercise, training, and game time exertion, allow the heart muscles to withstand vigorous and strenuous exercise, fight and prevents lactic acid build-up, reduce and eliminate cramping, and boost energy reserves and accelerates muscle recovery time.

What is missing is the proof that it works. You need to demonstrate to potential investors that what you have is real. Show test studies, include testimonials, provide lab reports, have supporting quotes from respected individuals in your market. In other words "Show me the money!"

The problem is, while your product is probably excellent and can deliver on all the promises you are making, you need to remember that most of the other companies seeking capital out there are not marketing such reliable products. Unless you demonstrate that the product actually works then you are immediately lumped in with all the other "junk" business plans.

Investors see so many business plans every day that they are looking for reasons to say no. Don't make it easy for them to turn you down by not having supporting evidence for your claims.

Next - Lesson #2 - Have You Done It Before?

Would you like your Executive Summary reviewed? Click on the "Get Your Plan Reviewed" button at the top of the page.

For more information, visit www.EvanCarmichael.com.

Executive Summary Review - WaterWorld - Lesson #1 - Does It Work?

The summary provides the reader with information on what the benefits of the drinks are. For example, the company claims that the Victory drink can restore energy lost through exercise, training, and game time exertion, allow the heart muscles to withstand vigorous and strenuous exercise, fight and prevents lactic acid build-up, reduce and eliminate cramping, and boost energy reserves and accelerates muscle recovery time.

What is missing is the proof that it works. You need to demonstrate to potential investors that what you have is real. Show test studies, include testimonials, provide lab reports, have supporting quotes from respected individuals in your market. In other words "Show me the money!"

The problem is, while your product is probably excellent and can deliver on all the promises you are making, you need to remember that most of the other companies seeking capital out there are not marketing such reliable products. Unless you demonstrate that the product actually works then you are immediately lumped in with all the other "junk" business plans.

Investors see so many business plans every day that they are looking for reasons to say no. Don't make it easy for them to turn you down by not having supporting evidence for your claims.

Next - Lesson #2 - Have You Done It Before?

Would you like your Executive Summary reviewed? Click on the "Get Your Plan Reviewed" button at the top of the page.

For more information, visit www.EvanCarmichael.com.

Keys to the startup company: Is it top leadership or lots of money?

"

Which comes first: management or money?

In a version of the ancient chicken and egg debate, a panel of Illinois financiers argued in Madison Tuesday over whether a fledgling company needs strong management to draw investment capital or if having funding will draw strong management.

"Flatlander Financing: Looking North For Opportunities" gave members of the Wisconsin Innovation Network a chance to hear that debate among other thoughts and advice offered by Ted Feierstein, a venture partner in the Prism Opportunity Fund and founding partner of Ascent Partners; Matt McCue, an associate with Hopewell Ventures in Chicago; and Bob Okabe, co-founder of Prairie Angels Capital Partners LLC and a principal in Illinois Partners.

Feierstein said a "lack of backable CEOs" has held back investing in Wisconsin.

When advocating for a deal, the first question his co-workers ask is, "Who is the superstar?" said Feierstein, who works out of Milwaukee.

"If you don't have a good answer (the potential deal) will die right there," he said. "Ultimately, it's the horse you're gonna ride" that matters the most.

If a company has a good idea, there will be competition, Feierstein said, "so unless you've got an experienced CEO who knows how to juke and jive, you will have all sorts of problems."

Feierstein said he believes there is a lot of capable management talent in state companies like GE Medical, Metavante and Fiserv, but added that "I don't know why they never pop out.""

For more information, visit www.EvanCarmichael.com.

Executive Summary Review - WaterWorld - Highlights - A Ready Market

What's good about this company is that it is attacking a ready market. Many companies seeking capital can only really be successful when a new technological breakthrough has been made, government approval has been granted, or an entirely new market has been developed.

This increases the risk for the investor as there is uncertainty if the necessary changes will occur or not. Before making a decision, investors will weigh the opportunity of putting money into a company against the risk of losing it all. Most entrepreneurs do their best to show the opportunity of investing in their company but do not focus any energy on demonstrating how the investor's risk will be minimized and money will be safe.

The markets that WaterWorld is targeting are existing, multi billion dollar industries which are looking for new, innovating products to solve their pain.

Next - Lesson #1 - Does It Work?

Would you like your Executive Summary reviewed? Click on the "Get Your Plan Reviewed" button at the top of the page.

For more information, visit www.EvanCarmichael.com.

Executive Summary Review - WaterWorld - Highlights - A Ready Market

What's good about this company is that it is attacking a ready market. Many companies seeking capital can only really be successful when a new technological breakthrough has been made, government approval has been granted, or an entirely new market has been developed.

This increases the risk for the investor as there is uncertainty if the necessary changes will occur or not. Before making a decision, investors will weigh the opportunity of putting money into a company against the risk of losing it all. Most entrepreneurs do their best to show the opportunity of investing in their company but do not focus any energy on demonstrating how the investor's risk will be minimized and money will be safe.

The markets that WaterWorld is targeting are existing, multi billion dollar industries which are looking for new, innovating products to solve their pain.

Next - Lesson #1 - Does It Work?

Would you like your Executive Summary reviewed? Click on the "Get Your Plan Reviewed" button at the top of the page.

For more information, visit www.EvanCarmichael.com.

How to find your angel investor

"You've come up with a world-changing idea, or at least an industry-changing idea. You have a business plan. Maybe you've even written some code or built a prototype. Now all you need is those few thousand bucks--or a few tens or hundreds of thousands of bucks--to get your new venture up and running. All that stands between you and your startup, in other words, is an angel.

Typically among the earliest sources of funding for would-be entrepreneurs, angels are individual investors who provide fledgling companies with seed capital--anywhere from a few thousand dollars to as much as $1 million. Angels play a critical role by investing in companies that venture capitalists consider too unproven and risky. In fact, during 2004 only 3,000 new firms were funded by VCs, while an estimated 48,000 businesses received startup capital from people who identify themselves as angel investors.

So where is your angel? Let these divine directives guide your search.

1 - Look for angels close to home.

When a young company has more optimism than income, friends and family are often the first to brandish their checkbooks. Relatives and old pals know you, and they (hopefully) believe in you, so their contributions are really an investment in you. Therein lies the danger: You don't want to spend the next 20 years listening to Uncle Irving grumble about how you squandered his $10,000 on some harebrained scheme back in 2006.

So don't take personal connections for granted: Treat friends and family like business partners. For instance, decide up front whether their money will be a loan--payable by a certain date with interest--or an equity stake, meaning they'll own a portion of your new company. Set expectations accordingly, bring in a lawyer to draft an agreement, and make sure it includes provisions such as liquidity preference (how much an angel gets before other shareholders if the company is sold) and other standard terms like a guaranteed option to invest in future rounds. Tip: Since VCs have a nasty habit of wiping out the holdings of unsophisticated angels, define any equity stakes as a percentage of whatever valuation the company receives after securing future rounds of funding.

Friends and family will also feel less vulnerable if you invest your own savings. By the time Carolina Braunschweig accepted a $15,000 loan from her father, she had bootstrapped CMB Sweets, a jam and preserves business she founded in 2004, through sales and side jobs. She treats her dad as a board member. "I give him regular updates on sales volumes, who reordered, and what new accounts my reps have landed," she says. "But I didn't accept any money until I had built the business with my own resources."

2 - Woo angels with good deeds.

Strangers are a different story. Even though they're seed-stage investors, angels who didn't know you in diapers usually want more than a well-thumbed business plan before they pony up cash. For a technology company, a working prototype is ideal angel bait. Retail or service ventures can provide references from potential customers who will confirm that, yes, they would buy what you plan to offer and pay the price you plan to charge.

Peter Cooper, founder of FeedDigest, came up with an ingenious way to gather thousands of such testimonials. A resident of Louth, England--a place so out of the loop that he calls it "the Kansas of Britain"--Cooper launched his online application, which automatically displays news, blog posts, and other content on a single website, in 2004. Once FeedDigest began attracting attention, Cooper put up a PayPal button and asked users to donate money to help him succeed. By early 2005 his customers had kicked in almost $5,000--about enough to cover his costs. But more important, the donations drew the attention of Kelly Smith and Adrian Hanauer, owners of a Seattle-based angel shop called Curious Office Partners. After watching FeedDigest gain traction, Smith contacted Cooper out of the blue and eventually invested about $100,000. "He had thousands of users that helped him keep his project going," Smith says. "I was on the lookout for a company like his.""

For more information, visit www.EvanCarmichael.com.