Bob is a Director and long-time member of the Pasadena Angels, has been investing in early stage companies for 5 years, and has been held numerous “C” level positions at private and publicly traded companies. To set the stage, as an early stage investor, I look to invest in a “perfect storm” company.  It all centers around Return on Investment, or Following on the heals of last week’s post from Andrea Belz, we have another guest blogger, Bob Aholt. Bob also teaches graduate level finance courses at Antioch University.   By Bob Aholt

Last week's angel investment report by the Angel Capital Association reported that investments by angel investors dropped nine percent in 2008, with a hefty percentage of angel investors--40 percent--expecting this year will be a down year. However, a quick check of local, Southern California angel investors finds that although angel investment is down, investors are still investing--albeit much more selectively. "Capital Capital efficient companies offering very competitive terms are still getting funded," says Al Schneider of the Tech Coast Angels , although it appears the group is much more sensitive about how it is investing in deals.

What would you do if you built a tremendously successful internet company and sold it? interviewed Ryan Scott to find out what he did after he sold Netcreations, the email list management company that he co-founded. (Curious think there are two kinds of entrepreneurs: The “wannabes,” who try to build companies so they never have to work again. I Curious about how Netcreations was built?

Last week, I was on a panel with other investors discussing the “do’s� and “don’ts� of angel and venture capital investing some one from the audience fired a series of intriguing compounded questions � why are the VC’s so illusive?, � All valid questions and valid statements – the event made me think that entrepreneurs view of the equity investment community is entirely different than that of the inner circle and this mismatch of perceptions is not disruptive and unhealthy. why don’t they have all their information available? Why don’t they disclose how

Jeff Fluhr and his friend from school got together and created a company called StubHub which they built up and sold to eBay. But, you know, I think it wasn't until after my first real company StubHub that people, I think, thought of me in that light. So I contacted the owner of the company and proposed to him that I be a distribution outlet for their product in retail channels outside of the Massachusetts area and began to help that company get In 2000, people had all kinds of assumptions about buying and selling tickets to events. They assumed it was illegal or

Selling the company was incredibly stressful. The company went from spending $10,000 - $12,000 in the 9-12 months before it was funded, to spending $4 million over the following 6-8 months, because his investors wanted a fast and large return on their investment. I asked Brian Johnson to teach what he learned from launching 3 startups because he has both the experience of an entrepreneur and the introspection of a philosopher. Brian is the founder of eteamz (a web site for youth sports), Zaadz (a social network for people who want to change the world) and Philosopher’s

One of the investment themes I’ve been focused on in the past 3 years has been Performance-Based Marketing.  When When I started investing the US advertising market was $300 billion with only 10% of it ($30 billion) of it being online and measurable.  One My firm, GRP Partners, invested in the company that innovated this entire category – Overture (formerly known as GoTo.com).  At One recession later and the US advertising market is about $245 billion – but still only 10-12% is online and measurable. By now we all know that the largest part of the

Question: My partner and I are trying to agree on an initial valuation to establish an equity share percentage for a seed stage company that is not yet operating. While it may be plausible, let me come at the valuation question from a typical Angel perspective - - we generally invest in deals that have a realistic chance of a 10x return in 5 years (or a 5x return in 3 years).  Therefore your goal is to convince the I realize there are many factors you take into account, but I am wondering about my partner’s suggestion that we use a multiple of year 4 EBITDA from the B round expansion

The bulk of Hedge Fund investment comes from the East coast – principally Connecticut and New York City – which has become the leading location for hedge fund managers. The bulk of venture capital investment comes from the West coast - principally Silicon Valley. In 1999 there were 1000 VC firms which invested $100 Billion. The Civil War II has begun but this time it’s not the North versus the South. This Civil War is about money under management in the financial services industry and it’s the West Coast versus the East Coast.

Investors might ask you this info, but not before they know who you are and what your company is all about. Often, particularly with new entrepreneurs, the would-be entrepreneur is completely dominating the conversation trying to sell an investor on their company–without bothering to ask what kinds of investments an investor makes, getting to know the investor better, etc. The more successful (and funded) entrepreneurs I know spend much more time getting Sid Mohasseb, one of the Tech Coast Angels, just emailed out about a new “entrepreneur happy hour” the group is running in Orange County, which got me thinking about how entrepreneurs should (or shouldn’t) approach angel and venture investors.