Angel Knowledge Series
    Best Practices in
    Spilled Milk: Avoiding Angel Losses.

    Panelists:
    • Centenial Investors, Quinten Messbarger.
    • Maximize Angels, William De Temple.
    • Piedmont Angel Network, Andrew Dreyfuss.
    • Pittsburgh Equity Partners, Ed Engler.
    • Moderator: Michael Price, CEO Ventures


    AGENDA.

    A. TOP 25 ANGEL SYNDROMES.

    1. Double Down On A Bad Hand (Bucking the odds).
    2. Midas Syndrome (Jumping back in too fast).
    3. Damn the Torpedoes (Failing too late).
    4. Can't Let Others Down (Martyrs rarely appeciated).
    5. Swimming Upstream (Superhuman effort for lower returns).
    6. Pioneers Get The Arrow (Too Early).
    7. All Dressed Up & Nowhere To Go (Too Niche).
    8. Elvis Left The Building (Loss Of Key People).
    9. We Have No Competitors (Delusional ignorance).
    10. CEOh No! (Bad leadership left in the game).
    11. Just Needs Good Leadership (Maybe, maybe not).
    12. Seeking Nirvana (One shot so must be perfect).
    13. Adult Swim (Buyers requiring strength).
    14. Three Billion by Year 3 (Unrealistic projections).
    15. For This Round (Next round unlikely or crammed down).
    16. If We Build It (Little attempt at testing market).
    17. Longer Sales Cycle than Thought (Late adjusting).
    18. Messiah Syndrome (I can straighten out the team).
    19. Time To Ramp Up (Inability to sell profitably).
    20. Much Ado About Nothing (Market Never Develops).
    21. If It Doesn't Fit (Must acquit, stay in your zone).
    22. No Seed Corn Left To Plant (Inability to budget).
    23. We Have a Huge Pipeline (Waiting on what?).
    24. We Will Crush Nike (Smart money is on dominators :-)
    25. Nuclear Winter (Change sectors or save the seeds).
    26. Demand Is About To Explode (Right timing hard).

    B. ERRORS IN SELECTION.
    - Poorly designed business model.
    - Picking a niche that looks good but isn't.
    - Following a hot trend with no substance.
    - Failure to adapt to a changing market.
    - Poor pricing strategy.
    - Failure to prepare for volatility of uncontrollable costs.
    - Declining or consolidating market.

    C. ERRORS IN FINANCING.
    - Overborrowing and too much leverage.
    - Undercapitalizing the business.
    - Reliance on critical financing that dries up.
    - Negotiating equity rounds based solely on the valuation.
    - Fraud or personal use of business funds.
    - Inadequate or ill-timed financing.
    - Securing the wrong type of financing.
    - Miscalculating the amount required.
    - Underestimating the cost of borrowing money.
    - Poor inventory management.

    D. ERRORS IN PRODUCT DEVELOPMENT
    - Lack of competitive advantages.
    - Ignoring customer needs.
    - New products that drag down profitable ones.
    - Falling in love with the product/business.
    - Lack of market, customer or buying habit awareness.
    - Failure to anticipate or react to competition.
    - Failure to anticipate or react to tech or market changes.

    E. ERRORS IN MARKETING/ SALES.
    - Competing head-to-head with industry leaders.
    - Sloppy or ineffective marketing.
    - Trusting your capital to well marketed salespeople.
    - Failure to get market traction.
    - Overdependence on a single customer.
    - Poor customer service, unqualified or untrained employees.
    - Poor market research leading to an inaccurate understanding.

    F. PROBLEMS WITH MANAGEMENT.
    - Poor internal controls and execution.
    - Failure to control controllable costs early.
    - Poor accounting.
    - Breakup of the founding team.
    - Poor execution.
    - Growing too fast or overexpansion.
    - Owners who cannot get out of their own way.
    - Tolerance of operational mediocrity.
    - Divorce or family pressure on time or money commitments.

    G. ERRORS ON LEGAL
    - Issuing founder shares without vesting.
    - Waiting to consider international intellectual property protection.
    - Disclosing inventions without an NDA or before Patent App filed.
    - Starting employees from competitors without checking their agreements.
    - Promising more than the business can deliver.

    H. ERRORS IN EXITING
    - No detailed exit plan.
    - Planning the optimum time for an exit.
    - Waiting too long to sell (optimum value during high growth).
    - Too much stock to cash ratio.
    - Spoiling by asking too much or too little.
    - Not structuring to minimize taxes.
    - Going steady with one buyer vs auction environment.
    - Insufficient preparation.
    - Earnouts gone bad.

    I. BAD LUCK
    - And of course, wrong place or the wrong time :)


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