Deming once said “A system must be managed. It will not manage itself. Left to themselves in the Western world, components become selfish, competitive. We can not afford the destructive effect of competition.” Many new real estate investors are taken in by the idea that once they set up their real estate business, it will run itself. They want to be able to retire entirely very quickly and avoid putting in any more effort into their investment company. This is a problem.

For your real estate business to flourish and grow, you must manage your power team and your deals. You must be responsible for your company’s success and you must occasionally innovate or change your methods around if you want to respond to the market and continue to grow in your business.

Real Estate Investing Tip #5. Running a company on visible figures alone.

Again, Deming was a believer in the intangible rewards of business. If you are running your company on yourself alone, you will not have a great chance at success. To succeed, you must have an invisible power team behind you. Your buyers might not see the contractors, assessors, and attorneys, but these invisible figures are exactly what will help you offer the best possible value to your customers.

Real Estate Investing Tip #6. Excessive costs.

Spending a fortune on marketing, useless information, unusable services and extras you don’t need is a real danger in any type of business – especially when you are starting out learning how to become a real estate investor. Yes, you need some knowledge or education in order to learn what to do and you cannot scrimp on hiring a power team who will help you put together winning deals. However, avoid buying toys until you start raking in money.

At the start, re-invest the money you make in order to grow your real estate investing business – you will achieve success much faster this way.

Deming also defined some lesser obstacles that affected businesses. These same roadblocks may be keeping you from the success you deserve in your real estate investing business:

Real Estate Investing Tip #7. Neglecting long-range investing business planning.

Sure, you may be focusing on the house you want to sell right now, but you must be thinking ahead 5, 10 and even 15 years so that you can start laying the foundation work for the sort of investing business you want to become in the future.

Real Estate Investing Tip #8. Relying on technology to solve problems.

A fancy website will not solve anything if you do not have the content or traffic to generate real estate deals through the site. A new cell phone will not solve your problem if not enough leads are calling. Focus on solving the root of the problem, rather than looking for the newest gadget.

Real Estate Investing Tip #9. Seeking examples to follow rather than developing solutions.

Real estate mentoring is a wonderful thing, but truly successful businesses eventually strike out on their own, offering something innovative or new – or just a twist on something that already exists.

Real Estate Investing Tip #10. Excuses.

You cannot assume that you won’t succeed in real estate investing and you cannot make excuses for any failures. Take responsibility, learn, and step up to the next opportunity!

Don’t believe the hype. It doesn’t matter if it is negative or positive hype about investing in property; do not take anything at face value. Always consider whether the person or media that is putting out the story might have ulterior motives.

Anyone interesting in selling you property or property products will only talk about the positives and the value of investing in property. The media likes to sensationalise the negatives, because that is what sells newspapers. You have to look at the evidence and seek impartial advice and make up your own mind.

You have to believe. You have to have a belief that you can make money from property. At times it can seem as though the property investing World is already saturated with people more experienced than you. You have to believe that there is room for you as well.

If you start off with negative self belief then you are on a slippery slope to failure and before you know it you will be another one of those that have “tried” property investing, but found that there was no money in it.

Decide why you want to invest and formulate a strategy around this reason. Being clear why you want to invest in property can create compelling reasons that will push you forward towards your goals, even when things are not going well. Once you know why you are investing you can then build a clear strategy based around what your goals and aims are.

Research and make sure the figures add up. Don’t just dive into investing in a location because you have heard a rumour on a forum that it “might” be the next property hot spot. You need to do your research and your own due diligence.

It will be hard work to begin with and it might take you several months to find the right location and the right type of property, but after that you can probably continue to invest in the same location for several years, so the initial hard work is well worth it and should pay off in the end.

It’s a numbers game. You have to be prepared to look at hundreds of properties to find a deal that meets your criteria and that corresponds with the strategy you have set out. This doesn’t necessarily mean making hundreds of phone calls a month to different estate agents or vendors.

You might achieve your goal by simply browsing the local newspaper which normally has at least a couple of hundred properties in, although a more proactive method is usually needed to be really successfully.

Have effective exit strategies in place. One of the main reasons many beginners fail in their efforts to become professional property investors or developers, is that they don’t have exit strategies in place.

You need to know what route you are going to take to get out of a deal if things do not go according to plan. You also need to have an idea of how you are going to off load the property in the long run, if you don’t plan to hold onto it forever.

Take a long term view. Successful property investors take a long term view of the property market. Many of the budding investors that have failed, have failed because they wanted to make a quick buck. If you are serious about learning how to become a landlord and being financially independent, then you have to take a long term view. This will help minimise your risk and will stop you from wanting to bail out if the property market goes through a bad patch.

Be careful of using property investment companies. There are a host of companies that claim to be able to buy investment properties for beginners, so that novices don’t have to do any of the work themselves. Some of these companies are good, many are terrible and a few are crooks.

I would advise you to learn the basics about what equates to a good property investment first, before you trust others to buy investment property for you. That way you can access the properties that they put in front of you and you will be able to tell if they are good or not, without being totally reliant on what the investment companies tell you.

If you are a beginner to making money from property, then by following the tips laid out here, you should be more equipped to go out and start hunting for those bargain properties. Keep in mind that people progress at different speeds and don’t get caught up in the thought that if you don’t become a millionaire in one month through property, then it’s not going to happen.

Find your own pace. However, make sure that you are also pushing yourself and forcing yourself to get out of your comfort zone because this is where the real growth, learning and wealth happens.

Over the decades gold has periodically spiked in price and then crashed. During the inflationary period that occurred in the late 1970s and in 1980, gold reached $850 an ounce before plummeting in value. Recently, we have seen a new spike in gold prices with gold reaching over $1000 an ounce. The latest surge has been fueled by record highs in gasoline prices, fears of inflation, and a weak stock market.

When gold prices surge, numerous investing companies spring up, touting gold as a wonderful investment. The companies describe the dramatic returns that gold has produced over the last two or three years, which dupes investors into believing that gold offers the prospect of a wonderful return. Unfortunately, gold is one of the very worst investments that an individual can make. When we examine long-term returns, we find that gold has failed to outpace inflation over the last 25 years. Gold has dramatically underperformed the S&P 500, corporate bonds, and even completely safe U.S Treasury securities. Simply put, gold is a horrendous investment for the long-term.

In addition, gold is one of the most risky investments an investor can make. The hype accompanying spikes in gold prices is often greatest just before the gold market crashes, luring investors into the market at the very top.

How can we avoid the temptation to invest in gold? Below I outline 7 tips.

Dr. Rob’s Practical and Emotional Tips for Resisting the Temptation to Invest in Gold

1. Ignore news reports that describe soaring gold prices. Historically, spikes in gold prices have been relatively short-lived.

2. Recognize your emotional vulnerability to being tempted to invest in gold. Descriptions of dramatic price increases often trigger feelings of greed and envy.

3. Keep in mind that investments that go up quickly have a tendency to go down quickly. Focus on generating steady returns over time.

4. Discount the claims made by companies that specialize in selling bullion-related investing products. These companies are more interested in sales commissions than in making money for you.

5. Always focus on historical averages for long-term returns, which will lead you to the stock market for building a strong nest egg over time.

6. Obtain advice from a licensed, qualified financial professional before making any investing decision. Financial pros can educate you on realistic expectations for long-term returns and guide you to products and services that will meet your specific needs.

7. Consider contacting a Financial Behavior Coach™, a Financial Behavior Consultant™, or some other professional who is specially trained to help you manage the emotional factors that impact money decisions. Don’t allow hope or greed to lure you into investing in gold.

As an Angel Investor, I had the privilege of seeing hundreds of entrepreneurs and small businesses pitch their ideas over the years.  By only reviewing the business plan behind these ideas, one cannot tell with any amount of certainty, which idea is a hit and which a dud.  Therefore, a pitch to the investor by the entrepreneur or senior executive becomes necessary.  At this stage, one may find that a poor pitch will make a good idea leave the arena empty handed, while a good pitch will make a not too great of an idea walks away with all the loot. 

Here are a few tips that when observed, will help you clinch your desired investment.

Get to the point quickly.  One will never really know how long any meeting with an investor will actually last.  Therefore, make your key points quickly and early, as you may not get a chance to make them at all.

Tell them what you do first.  Capture the attention of the audience in 30 sec with an elevator pitch that includes exactly what you do.  This is very important.

Talk about your background.  Investors invest in people through business.  Therefore, make sure that you provide an argument for why they should invest in you.  This is critical.  Include information concerning other key team members and advisors if there is time.

Know your competition intimately.  You should be able to discuss details about your competition and be very clear about how you will position yourself against the competition.  You are not unique, there is competition everywhere, and do not underestimate the importance of the competition.

Be specific about revenue.  Do your market research and be specific about the revenue opportunity.  Make assumptions and guesses when putting together your revenue projections, but make sure they are very realistic.  Do not claim to have a very small percentage of an enormous market, show it in your financials.  Give examples of similar products, track them, and use them as base for your projections.

Tell them exactly what you need and how they will benefit.  Be specific about how much money you need from the investors, how you will use it, and how they will get their return on this investment.

Know your product.  You need to know your pitch inside and out.  You should not be spending time looking at the screen or reading the slides, which suggests that you are not comfortable with the material.  Practice your pitch until you are completely confident about giving the presentation.  You should be able to continue to make your points without the slides or any other aid.

Demonstrate your product only when necessary.  Do not demonstrate your product when pitching.  Investor wants to hear about the business opportunity, not watch a product demo. If it is necessary to demonstrate you product, use visuals to help the investor understand how the technology fits together.  Investors do not really want to know all of the technical details; they just needed to understand the big picture.

What are your top tips for creating an awesome pitch?

Controversial is an understatement since John Logan is the founder and CEO of SafeGuard Guaranty Corporation which will be the first insurance company in the world to offer insurance against divorce globally some time next year.

“After my divorce I did some quick accounting and realized that I had spent the equivalent of nearly half of my annual income in just legal fees. Adding in all the other related costs including setting up an entirely new household put me in such a dire financial position that it took me years to recover. I knew I couldn’t be the only person in the world to suffer though this.” Logan recounted.

And so, says Logan, began nearly five years of research before incorporating his company and starting the search for funding this venture.

“It’s just a question of time for us to find the final few dollars need. We know this will only appeal to a select few investors for a number of reasons, but we also know those few will be richly rewarded.” Logan said. “This is a nearly 200 billion dollar market that we’ll monopolize for at least a while. And we already know the demand is there.”

But raising the capital SafeGuard already has in its coffers has been a laborious process. Insurance is not a sector that is known for innovation and of late, the industry in general has received a lot of unwelcome scrutiny and bad press.

“A lot of Angel investors come from technology or some form of science related industry or even real estate, so they tend to invest in what they know. It’s an incredibly tough courtship to transform someone’s thinking to grasp an industry they’re unfamiliar with, let alone the fact that we’ve created a whole new business model. You don’t readily find Angel groups or networks whose investment criteria focuses on insurance.” said Logan. “Raising money for something this unusual can be a maddening process.”

So what guidance does this serial entrepreneur have for others contemplating raising capital via Angel investment?

“Before you do anything, make sure your family is on board.” Logan says. “This can be a long and financially draining process that may require sacrifices you will never have considered before. Don’t risk everything trying to reach your dream or it may become a nightmare.”

Logan gives these key points to reflect on:

1. Do your homework. Sending your business plan for a new consumer product to an Angel group whose investment criteria is strictly life science technology is a waste of your time and theirs. Make sure you’re a good fit for what they’re looking for.

2. Ask them what they look for. Most Angel websites will give you explanations of the investment criteria they seek. Many, like the former Apprentice winner Kelly Perdew’s Angel-leveraged Capital fund (www.angel-leveraged.com ), will literally spell it out for you point by point. If you can’t find that kind of information, contact them and ask.

3. Begin with the end in mind. Aside from the obvious Stephen Covey reference, what this means is that beyond the expected common sense things like a good management team, top-notch business plan, realistic finances, etc., an exit strategy is a key component of any Angel’s decision making process. They want to know how and when they can get their money out. Sooner (one or two years) is better than later (five to seven years). Don’t expect them to read your mind. Spell it out to them.

4. Showmanship. Not P.T. Barnum stuff, but if you’re not the best presenter on the team, CEO or not, let someone who is be “the face” of the company. There is a fine line between a good presentation and a horrible one. Follow Guy Kawasaki’s 10-20-30 rule of PowerPoint (). And be able to give the presentation blindfolded and backwards.

5. Know your stuff. Nothing screams “Run away! Run away!” to an Angel more than an entrepreneur who obviously hasn’t done his homework and anticipated every question that anyone would ever ask. If you think you’ll be pressed for time, create a FAQ sheet and make it available to Angels before and after the presentation.

6. Know your limitations. Everyone says they’ve got a “proven management team” but the truth is if they were truly proven you wouldn’t be talking to Angels about raising $1-3 million, you’d be talking to VCs about raising $10-30 million. Especially if your goal is to eventually do an IPO, know that the team that gets the business rolling is not necessarily the same one that runs the next Google. And that includes the CEO. Unless your forte is running Fortune 100 companies, don’t expect investors to believe you can just because you’re the largest shareholder.

7. It’s the numbers, stupid. I’ve never hit right on my five-year projections and I’ve never met anyone psychic enough who has. You’re either way over and figuring how to keep it that way or way under and frantically hunting for a correction. In the latter case, the likelihood that you had a real business plan that can change as economic factors change is slim. If your plan hits a home run in the first two years, great, but any further out is speculation pure and simple. Don’t kid yourself into believing that any Angel will look at your 10-year numbers and salivate with greed.

8. Know the competition. Even if you’ve found the Holy Grail in a truly untapped market, there WILL be competition. Probably from the day you launch. Your job is to know who that is or will be. And how that competition will impact your company in every way. If you don’t, buy some lottery tickets because no Angel will take you seriously.

9. Be prepared to negotiate. Your valuation, regardless of who or how you arrived at it, is simply a starting point. If someone if going to fund a big chunk of your company, you had better have wiggle room.

10. Leave your Ego at home. Confidence is a good thing. Angels like entrepreneurs that show no doubt in their abilities. However, arrogance or defending a point that you can’t absolutely prove beyond a shadow of a doubt is self-defeating. Sure you’ll run into pompous megalomaniac know-it-alls from time to time, just remember that this isn’t a sales job where every “No” brings you that much closer to a “Yes”. There are no guarantees in finding Angels, so bring a thick skin and know that start-ups and children are not the same so don’t act like you’re losing custody if you have to give up more control than you originally wanted.

The bottom line is that there are many subtle factors outside of getting the major components of your business in order. Battle-hardened entrepreneurs laugh it off as part of the process, but for some it can be like hunting Sasquatch. For others it’s like trying to catch spawning trout by hand. In any case, it can be frustrating and exhausting both emotionally and monetarily, so unless you’re extremely lucky, don’t expect Angels to be beating a path to your door. The money is out there, there’s no question about that. Educate yourself and your team as much as possible BEFORE the search begins, and good hunting.

Jim Mellon and Al Chalabi say such fears are unfounded. In fact, the opposite is true. As our planet’s dwindling resources become ever more scarce, and the need to find alternate energy sources becomes more pressing, green investing will start paying off in a big way. Getting in the right markets now can help you create a prosperous future—and in an age where traditional retirement avenues are failing, that’s no small feat.

“As baby boomers age and retire and modern medicine keeps us all alive longer, the pension plans set up by corporations and governments are becoming ever more strained,” says Mellon, coauthor along with Al Chalabi of the new book The Top 10 Investments for the Next 10 Years: BigIdeas, MoneyFountains and Your Path to Prosperity (Wiley, February 2008, ISBN: 978-1-84112-802-3, $29.95). “You simply can’t rely on those sources to keep you going when it’s time for you to retire. That’s why it is so important to be a savvy investor now. And going green with at least some of your investments is a sure moneymaker.”

The authors explain that, in investment terms, the biggest theme of all over the next ten years will be the broadly defined “green” movement. New methods of generating power, conservation measures, and changing fiscal regimes in relation to the use of power will create some of the biggest global investment opportunities.

“Significant amounts of capital in almost every part of the world are already being deployed to take advantage of these trends,” says Mellon. “New plants are being built to manufacture photovoltaic cells for solar power projects. Hydrogen fuel cells are being developed at a rapid rate to a point near commercialization. And nuclear power stations are being planned or built in quantity. In addition, wind farms now dot many landscapes. The whole ‘renewables and new energy’ industry is on the cusp of a breathtaking advance.”

Wondering how you can take advantage of these growing green opportunities? Here are just a few tips that could help you prosper:

Put your money in renewables. Most developed nations are racing to figure out how to make the move to green energy. From wind farms to tidal and wave projects; from waste-to-heat projects to more extensive nuclear generation; with, of course, solar power coming up on the rails—the race is on to transform the electrical energy generating landscape of the world.

“Perhaps the most visible of these initiatives occurs in the form of wind power,” says Mellon. “All across Europe, wind farms are sprouting like mushrooms. An industry once derided as a novelty is now a multi-billion euro/dollar sector all on its own. But beware: If you choose to invest in the wind farm sector, do your research first. This is a capital-intensive business, subject to a lot of government interference and scrutiny, and some sophisticated investors have already gotten there first and creamed off some of the good potential returns.”

Invest in these conservation companies. Companies involved in conservation, wind power, and nuclear power are likely to see significant growth in coming years, and that’s good news for the environment and their investors. One company worth looking into in those areas is Fuel Tech, a US company that is working to cut a substantial percentage of carbon emissions from fuel combustion units. Or check out Clean Air Power, which is a London-listed company working to get trucks to use natural gas. And, of course, there is nuclear. In this area investors might want to look at Niger Uranium, a London-listed company exploring for uranium in Africa.

“Like any realm of investing, it’s one thing to know the options are out there, and a completely different story knowing exactly which companies to look into,” says Mellon. “These are all great green options.”

G is for Green…and Germany. Germany is the world’s biggest consumer of PV cells—which are used to make solar panels—because of the favorable fiscal and monetary regime for solar power in that country. Today, the country accounts for half of all the solar PVs installed in the world. The reason that the German market is growing so fast is because of the so-called Feed-in-Tariff. This means that anyone connected to the grid (and that includes private homes) gets a guaranteed payment for putting green electricity into the grid of about four times the market rate—and that goes for solar PV, wind, or hydroelectricity.

“Germany has been so aggressive in promoting solar power that several world-beating companies have grown up to satisfy the local—and subsidized—domestic demand,” says Mellon. “Q-Cells is one example—the company started making PV cells in Germany in 2000 with 19 staff members. Today, it has over 1,500. It exports half of its product and is the world’s second largest maker of PV cells, after Sharp of Japan. And if you’re looking to invest, the company might be good place to start.”

Invest in the elements. Big money is in investing in the extractive industries, which mine the key components of solar panels. Gallium, indium, germanium, and other materials are vital to the PV story, and the companies that mine and extract these components are a great place to invest your money.

“Jellon Limited is doing it,” says Mellon. “Other promising options include: Recyclex, a French company producing gallium amongst other metals; New Jersey Mining Company, which produces gallium from mining operations in Idaho; Gold Canyon Resources, which has prospective gallium deposits in Nevada; Bluglass, an Australian producer of gallium; Dowa Mining, listed in Japan, it is the world’s largest producer of Gallium; and AXT INC, a NASDAQ-listed maker of satellite solar panels, mainly producing semiconductor substrates for electronic and optoelectronic uses.”

“Carbon” trading in the European Union shows promise. Countries that are part of the Kyoto Protocol have been forced to figure out how to limit their carbon emissions without damaging the economies in their countries. One way many European countries are doing this is through an Emissions Trading Scheme in which each country can emit one ton of carbon dioxide. The country then assigns permits to their biggest emitters allowing them certain amounts of emissions. Any company not needing its whole allocation is then free to sell the surplus in the ETS market where the buyers are typically companies that need more than their allocations.

“The idea is that, because there is value to these permits, companies will be encouraged to invest in green technologies, especially as the ‘cap’ on total allowable emissions gets progressively lower, making fewer of the permits available in future years,” says Mellon. “The ETS market is becoming a large and interesting one. Investors may wish to consider looking at funds that offer an entry to investing in such permits—one such is Climate Change Capital, listed on the London Stock Exchange.”

Learn more about camelina. Although most “bio fuels”—crop-based fuels—make very little ecological or financial sense, there is one crop that would be worth investors’ keeping an eye on. “This crop is ‘camelina,’ which is an interesting low-cost feedstock for biodiesel,” says Mellon. “It has high energy, is non-food (so that food production is being diverted into energy), uses marginal land that requires no irrigation, is sustainable, and has a very low cost per liter. There are no publicly available companies in this space as of yet, but if you’re interested, keep an eye out for some of them to pop up. Check out www.camelinacompany.com.”

A move away from landfills will be profitable. Another area of potential interest is waste-to-energy systems. Here, the problems from using landfill sites in many industrialized countries—including the space constraints and the by-production of dangerous methane gas—are opening the doors for a new industry to develop.

“The waste-to-energy industry is one that seeks to turn waste into energy by burning it, or by using the by-product methane gas, which results from disposal of any organic waste, to generate heat and electricity,” says Mellon. “Companies involved in the waste industry worldwide include UK companies Shanks and Biffa, both listed on the London Stock Exchange. These companies are already involved in landfill site management, waste collection, recycling, and disposal. Another is the Japanese company Daiseki, which is that country’s only nationwide industrial waste operator. Other promising opportunities are with Séché Environnement in France and Lasila Tikanoja of Finland, both involved in new recycling technologies.”

Energy-saving will help you save in more ways than one. Within the next few years, energy-saving gadgets could be commonplace in all households. Already people are switching to low-energy lightbulbs, and other products are sure to follow. “Imagine all the computers that are turned on in the world right now,” says Mellon. “How much energy would be saved globally if each new PC sold came with a fan or cooling device that was just 5 percent more efficient? The same goes for TVs, fridges, heaters, air conditioners, etc. With energy-savings, it’s a numbers game—historically, we haven’t bothered to fine-tune energy consumption of devices because energy supply has not been an issue. But now there are just so many devices in every household that it’s really adding to the problem. Look for more companies to pop up that will provide energy-saving solutions for the household appliances we use every day.”

Overwhelmed? Invest in an ETF. The sheer volume of opportunities in the green market can be overwhelming for any investor. Luckily, investors can take advantage of this market by investing in alternative energy in a more general sense through the Market Vectors Global Alternative Energy ETF, which trades in the US under the symbol GEX. The holdings of the fund range between 1 and 11 percent. Before the fund invests, companies must meet the following requirements: 1) Represent the 30 stocks in the Ardour Global IndexSM (composite) with the highest average trading volume and market capitalization, 2) Have a market cap exceeding $100 million, 3) Have a three-month trading price greater than $1.00, 4) Be involved in the business of the alternative energy industry (i.e., derive over 50 percent of total revenues from the industry).You can read more about this ETF by visiting www.vaneck.com.

“It is not for us to judge whether or not we may all be burnt to cinders by the sun in 30 years or so, unless these developments are successful,” says Mellon. “It is enough for us to say only that these green opportunities are a gold rush at its very earliest stages, and it’s a gold rush that every serious investor should consider.

“That said, investors should remember to always diversify their investments,” he continues. “The green realm is full of promise, but having too many eggs in one basket always carries risks. There are other great opportunities out there with real estate, commodities, and more. To ensure your investments have made the most for you over the next ten years, you’ll want to check those out as well.”

# # #

About the Book:

The Top 10 Investments for the Next 10 Years: BigIdeas, MoneyFountains and Your Path to Prosperity (Wiley, February 2008, ISBN: 978-1-84112-802-3, $29.95) is available at bookstores nationwide, from major online booksellers, and direct from the publisher by calling 800-225-5945. In Canada, call 800-567-4797.

“An insurance company start-up is not exactly an Angel investment darling.” said Logan in a recent telephone conversation. “Not to mention we’ll be a little controversial. They love you right up until it’s time to write the check.”

Controversial is an understatement since John Logan is the founder and CEO of SafeGuard Guaranty Corporation which will be the first insurance company in the world to offer insurance against divorce globally some time next year.

“After my divorce I did some quick accounting and realized that I had spent the equivalent of nearly half of my annual income in just legal fees. Adding in all the other related costs including setting up an entirely new household put me in such a dire financial position that it took me years to recover. I knew I couldn’t be the only person in the world to suffer though this.” Logan recounted.

And so, says Logan, began nearly five years of research before incorporating his company and starting the search for funding this venture.

“It’s just a question of time for us to find the final few dollars need. We know this will only appeal to a select few investors for a number of reasons, but we also know those few will be richly rewarded.” Logan said. “This is a nearly 200 billion dollar market that we’ll monopolize for at least a while. And we already know the demand is there.”

But raising the capital SafeGuard already has in its coffers has been a laborious process. Insurance is not a sector that is known for innovation and of late, the industry in general has received a lot of unwelcome scrutiny and bad press.

“A lot of Angel investors come from technology or some form of science related industry or even real estate, so they tend to invest in what they know. It’s an incredibly tough courtship to transform someone’s thinking to grasp an industry they’re unfamiliar with, let alone the fact that we’ve created a whole new business model. You don’t readily find Angel groups or networks whose investment criteria focuses on insurance.” said Logan. “Raising money for something this unusual can be a maddening process.”

So what guidance does this serial entrepreneur have for others contemplating raising capital via Angel investment?

“Before you do anything, make sure your family is on board.” Logan says. “This can be a long and financially draining process that may require sacrifices you will never have considered before. Don’t risk everything trying to reach your dream or it may become a nightmare.”

Logan gives these key points to reflect on:

1. Do your homework. Sending your business plan for a new consumer product to an Angel group whose investment criteria is strictly life science technology is a waste of your time and theirs. Make sure you’re a good fit for what they’re looking for.

2. Ask them what they look for. Most Angel websites will give you explanations of the investment criteria they seek. Many, like the former Apprentice winner Kelly Perdew’s Angel-leveraged Capital fund (www.angel-leveraged.com ), will literally spell it out for you point by point. If you can’t find that kind of information, contact them and ask.

3. Begin with the end in mind. Aside from the obvious Stephen Covey reference, what this means is that beyond the expected common sense things like a good management team, top-notch business plan, realistic finances, etc., an exit strategy is a key component of any Angel’s decision making process. They want to know how and when they can get their money out. Sooner (one or two years) is better than later (five to seven years). Don’t expect them to read your mind. Spell it out to them.

4. Showmanship. Not P.T. Barnum stuff, but if you’re not the best presenter on the team, CEO or not, let someone who is be “the face” of the company. There is a fine line between a good presentation and a horrible one. Follow Guy Kawasaki’s 10-20-30 rule of PowerPoint (). And be able to give the presentation blindfolded and backwards.

5. Know your stuff. Nothing screams “Run away! Run away!” to an Angel more than an entrepreneur who obviously hasn’t done his homework and anticipated every question that anyone would ever ask. If you think you’ll be pressed for time, create a FAQ sheet and make it available to Angels before and after the presentation.

6. Know your limitations. Everyone says they’ve got a “proven management team” but the truth is if they were truly proven you wouldn’t be talking to Angels about raising $1-3 million, you’d be talking to VCs about raising $10-30 million. Especially if your goal is to eventually do an IPO, know that the team that gets the business rolling is not necessarily the same one that runs the next Google. And that includes the CEO. Unless your forte is running Fortune 100 companies, don’t expect investors to believe you can just because you’re the largest shareholder.

7. It’s the numbers, stupid. I’ve never hit right on my five-year projections and I’ve never met anyone psychic enough who has. You’re either way over and figuring how to keep it that way or way under and frantically hunting for a correction. In the latter case, the likelihood that you had a real business plan that can change as economic factors change is slim. If your plan hits a home run in the first two years, great, but any further out is speculation pure and simple. Don’t kid yourself into believing that any Angel will look at your 10-year numbers and salivate with greed.

8. Know the competition. Even if you’ve found the Holy Grail in a truly untapped market, there WILL be competition. Probably from the day you launch. Your job is to know who that is or will be. And how that competition will impact your company in every way. If you don’t, buy some lottery tickets because no Angel will take you seriously.

9. Be prepared to negotiate. Your valuation, regardless of who or how you arrived at it, is simply a starting point. If someone if going to fund a big chunk of your company, you had better have wiggle room.

10. Leave your Ego at home. Confidence is a good thing. Angels like entrepreneurs that show no doubt in their abilities. However, arrogance or defending a point that you can’t absolutely prove beyond a shadow of a doubt is self-defeating. Sure you’ll run into pompous megalomaniac know-it-alls from time to time, just remember that this isn’t a sales job where every “No” brings you that much closer to a “Yes”. There are no guarantees in finding Angels, so bring a thick skin and know that start-ups and children are not the same so don’t act like you’re losing custody if you have to give up more control than you originally wanted. 

The bottom line is that there are many subtle factors outside of getting the major components of your business in order. Battle-hardened entrepreneurs laugh it off as part of the process, but for some it can be like hunting Sasquatch. For others it’s like trying to catch spawning trout by hand. In any case, it can be frustrating and exhausting both emotionally and monetarily, so unless you’re extremely lucky, don’t expect Angels to be beating a path to your door. The money is out there, there’s no question about that. Educate yourself and your team as much as possible BEFORE the search begins, and good hunting.