Entrepreneurs Frequently Asked Questions
Q: How can I be assured that someone won’t copy or steal the idea?
A: First, your company should have clear barriers to competition. Second, ideas are a dime a dozen. The implementation of the idea is usually hard. Thirdly, please do not disclose confidential information. We don’t sign confidentiality agreements until the due diligence state (and then they are signed by the individual members at their personal discretion). Just tell us WHAT your intellectual property will do and how it will benefit. Don’t tell us HOW it actually works.
Q: Do financials have to show huge “hockey stick” growth in years 3, 4, 5, etc. ?
A: What’s absolutely true is that investors are looking for financial and “scale.” “Scale means that as revenues grow, so do profits. Investors have different financial requirements, so you couldn’t characterize all are the same. Your financial should be realistic, with the confidence of the revenues and profits that you can deliver.
Q: Will angel investors want to control the board of directors?
A: No. Most Angel Groups request one Board Seat and only if they can be a useful board member. More likely, the angel that leads your due diligence will be appointed by agreement between you and the other angel investors to represent them and distribute regular timely information.
Q: I have a private placement memorandum (PPM). Can I simply send that in for members to invest in?
A: No. We rarely look at PPMs. We are business savvy people and want to look at your plan in detail and get to know you and your business.
Q: Can I dictate the term sheet?
A: You can try.
Q: How should I value my company? Should I use the Discounted Cash Flow method in valuing my company
A: Valuing early stage technology companies is very subjunctive and not easy. Using DCF method is usually not appropriate for early stage companies.
Q: Will FSI Angel members help me with any thing other than cash?
A: Yes. There is a wealth of experience in multiple industries, as well as business contacts.
Q: Who makes the decision to invest?
A: Each FSI Angel member decides individually whether to invest or not. FSI’s Angel Network is not a fund and does not syndicate or broker deals.
Q: Does the FSI Angel Network want exclusivity on my deal?
A: Absolutely not. We encourage you to present to other angels, venture capital funds and other forums. With the right support and mentoring. It will be easier for you to generate interest.