In today’s Six Minute Strategist Eye Piece, I would like to bring an excellent article from this weekend’s FT to your attention.
In the Money supplement, Jonathan Moules wrote a piece warning that business Angels can be a mixed blessing. (the link takes you to the FT cuttings service where you can download a PDF of the article.
He highlighted a practice called “White Washing” where Angels take control of a business, eject the founders and then through an injection of new capital force existing shareholders to either match the funds or face very significant dilution. For entrepreneurs – forewarned is Forearmed.
He also had an amusing but also helpful Spotters Guide to Business Investors (click for the link). In Summary:
Shark Angels – Investor takes advantage of Entrepreneur’s inexperience
Crazy, Rich Uncles – Investors have weak expectations
Litigious Angels – Investors who like to sue
Superior Angels – Overbearing and negative investors
Megalomaniac Angels – Investors who want to take control
Chief Executive Angels – Back Seat drivers
Meddling Angels – 24 Hour control freaks
Has-Been Angels – Investors who won’t close a deal
Dumb Angels – Rich but Stupid
For anyone who doesn’t regularly read the FT the Saturday money supplement has great articles on Entrepreneurship in side the back pages of the money Supplement. Don’t say I didn’t warn you though!
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