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Angel investors

4/20/15       
Mel Member

Anyone here ever work with angel investors?

Smart folks with input on the subject?

Sorry Blushing Tim-- it is indeed another Mel thread ;)

4/21/15       #2: Angel investors ...
D Brown

Is this post about wood working ?

4/21/15       #3: Angel investors ...
John S  Member

Personally, I have never worked with angel investors, but I know other people who have. From talking to other folks, I'm not sure anyone would call them "angels" after they hand over the money. I'm sure it depends on the investor, but let's face it, they are after the money and nothing else. And just like you would, they want to protect and grow their investment. Some can get pretty tough to deal with.

Before I started my first business, I was told that it's always best to go it alone if you can. Only bring in an investor if you have no other choice, and then be ready to give up some control because the person supplying the money will most likely want to be involved than you want them to be.

4/21/15       #4: Angel investors ...
Tom C

Yeah.... My wife with a good job with benefits.... and Sweat Equity Brokers.

4/21/15       #5: Angel investors ...
Kilgore Trout Member

I have had several customers that offered to invest in my business. Upon consult with others, I opted to go to a bank for financing as needed. The reason was that with a bank, it is cold and formal, and everything is according to Hoyle, whoever he was.

With customers as investors, I was afraid there would be favors and gimmes that could interfere with the viability and independence of the business. With a bank, I could easily maintain my independence and function well.

Also, from a point of future sale of my business, if there is a good track record with a bank, then it is a real plus for the company. Better than a few lines on a financial that are more vague than explanatory.

So, 20 years later, I found out just how cold and indifferent the bank can be in 2007. I probably would have fared better with the customer/investor, but still would have lost most of what was gained from 25 years of steady 10-15% growth every year.

Technically, aren't angels and devils the same creature, depending upon your viewpoint?

4/21/15       #6: Angel investors ...
David Waldmann  Member

Website: vermonthardwoods.com

25 or so years ago one of my customers wanted in on my business. He now works for me and I'm glad I didn't take him on as an investor. He's a great guy but our outlooks are different.

"Technically, aren't angels and devils the same creature"

Well, sort of. Devils used to be angels. Sounds like what others are saying about angel investors...

4/21/15       #7: Angel investors ...
Popeye Doyle

Hoyle wrote a book of rules for card playing. I might still have a copy around here somewhere.

As for the topic, I rely on the old adage "Neither a borrower nor a lender be".

If you don't owe anyone any money then only you have a say in when your business is out of business.

4/23/15       #8: Angel investors ...
Mel Member

I know that now they do group investors. Can't be too different then reporting to a board of directors, which i don't find so bad.

I can imagine familly investors to be worst... But then i guess it all depends.

How about venture capitalists? Anyone one down that route?

4/23/15       #9: Angel investors ...
rich c.

While you are moving around the edges for financing, why not kickstarter? Venture capitalists and woodworking shops, seems like that would be the greatest sales pitch in the history of man if successful. I'm sure they like businesses with just a slightly higher profit potential. Oh just had another thought, Shark Tank!!!!!!

4/23/15       #10: Angel investors ...
Pat Gilbert

Shark Tank would laugh a woodshop proposal off of the stage.

4/24/15       #11: Angel investors ...
Mel

It's not that crazy to ask questions, or to want to go big.

Of course if you think Shark Tank it seems ludicrous but there are smaller venture capitalists that finance smaller projects.

From what I'm reading up the big attraction is a) new spin/use on technology b) solid exit strategy. I'm certain I can provide both.

Good to know it's rare in the industry though. Doesn't mean it's impossible!

Any bets on the table if I can find some sort of funding? I like bets!

4/24/15       #12: Angel investors ...
Pat Gilbert

What you talking about Willis?

The housing industry boomed from the 90s until 08. The reason was demographics and an abundance of money made available to home buyers which created the bubble mentality.

The housing market will not approach what it was. It will increase eventually as the population grows.

Right now the upper middle class residential and high end residential and big commercial are the only thing going and that is because of the Fed Qes.

This is because of speculation but NOT because of investment. Investment is not occurring so jobs are not being created.

The growth markets are going to be healthcare and maybe RVs? and maybe the motorcycle business?

Government spending is around 22% of GDP but that is going to go away because of entitlements. At some point near 2030 the entitlements and the debt service are going to cost more than tax revenues.

I would look to foreign economies for growth. But not China for a while or the Euro. Actually the world is going to be on it's ass for a while with the energy sector plummeting.

Surprising one sector that might do well is agriculture.

In the wood industry I don't see it.

4/24/15       #13: Angel investors ...
rich c.

Pat, You think ag is going to do well? Ask John Deere, they are down 27% for the first quarter for ag and turf, expecting a 23% drop for the year.

My point exactly with the Shark Tank, same response would be expected with venture capitalists.

Mel, I'm really tempted with that bet, but since I have no idea what you make, where you make it, how much money you are after, and even how long you have been in the industry, it's just too long of odds for me. Oops, maybe that is your creative way to raise money! How long have you been a business owner?

John Deere Earnings

4/24/15       #14: Angel investors ...
Pat Gilbert

A lot of investors are investing in farm land. They are saying no matter what happens people have to eat. That and many farmers are retiring.

4/24/15       #15: Angel investors ...
David Waldmann  Member

Website: vermonthardwoods.com

RE: Shark Tank

I agree that not many wood products businesses would fare well in the Tank. Nevertheless, I enjoy watching it, and feel it helps me focus my business when I think how I would have to answer some of the questions they pose, and then what the "right" answer is.

4/24/15       #16: Angel investors ...
Pat Gilbert

As to the ST mindset, I don't see the wood business as scaleable/franchisable. Truthfully a trade is not a business in that it is not transferable easily.

However it is more transferable if you narrower your focus.E.G. shudders, or kitchens. IOW not custom work.

4/24/15       #17: Angel investors ...
David R Sochar Member

Brief Diversion: Does anyone watch The Profit? I find it predictable and a bit too dramatic. But then, just like passing a car wreck, I cannot resit looking. Maybe it is the same reasons that people watch soap operas - it makes their own lives look tolerable by comparison.

4/24/15       #18: Angel investors ...
David Waldmann  Member

Website: vermonthardwoods.com

I watch The Profit as well. And, like the ST, I find it not only entertaining but generally educational as well. As "Uncle Kevin" says, "it's all about the money". A common problem with crafts/trades-people is that A) they often are not great business people, and B) that leads to them not being very wealthy and therefore C) they think their products are too expensive. So, rather than try and make the business more efficient (usually by growing/expanding) to lower their costs, they lower their prices.

While it's not ALL about the money for me, I find the way these moguls think very instructional.

Of course the shows are dramatic - that's what grabs viewers, and viewers is what the producers are selling.

4/26/15       #19: Angel investors ...
Pat Gilbert

Rich

This is from Guru Focus:

Deere & Company is the largest manufacturer of farming machinery in the world. Deere & Company also manufactures forestry and construction equipment. In addition, the company operates a financing division to help customers finance expensive equipment.

Deere & Company is one of Warren Buffett (Trades, Portfolio)’s most recent purchases. The company is a timely buy as it is nearing its cyclical trough which historically reduces the company’s earnings and share price. This gives long-term investors a chance to pick up shares of this high quality business for a discount. With a price-to-earnings ratio of just 11.5, Deere & Company appears to be significantly undervalued. Peak earnings during the company’s last cyclical peak were $9.08 per share. During the next peak, the company should see earnings-per-share of at least $10 per share. The company has traditionally had a price-to-earnings ratio of around 10 during peak earnings years which will result in a share price of at least $100 when the company reaches its cyclical peak. At current price, Deere & Company is likely undervalued by at least 10%.

The company’s competitive advantage comes from its brand recognition and reputation for quality in the farming machinery industry. Deere & Company’s competitive advantage has given it a 60% market share of the farming equipment industry in the US and Canada.

Long term growth prospects are bright for Deere & Company. Increased affluence and population growth in emerging markets will likely drive demand for food, grains, and farming equipment globally. Over the last decade, Deere & Company has averaged EPS growth of over 12% a year. The company should continue to grow EPS at a double-digit rate over full market cycles going forward. This will result in more-than-satisfactory returns for shareholders. In addition to solid growth, Deere & Company currently has a dividend yield of around 2.7%, which provides current income for dividend stock investors.

4/26/15       #20: Angel investors ...
Pat Gilbert

One more:

Food and agriculture accounts for about 5.9% of the global GDP.

Global food retail sales alone account for about $4 trillion/year, and food accounts for 15% of what American households spend each year.

It is an industry ripe for disruption.

This is a blog about how every aspect of food is getting disrupted.

[ Click to Tweet about this (you can edit before sending): http://ctt.ec/KWYB9 ]

Sensors, networks, machine learning/AI, robotics, 3D printing, synthetic genomics, stem cell science and material science are going to transform how your food is produced, delivered and consumed.

While this arena is going to change dramatically, we forget how much food has changed already over the past two centuries.

In 1790, farm jobs accounted for 90 percent of U.S. jobs, compared to less than 2 percent today.

Farm Jobs, % of Total U.S. Jobs

And while farming jobs have been lost to automation, the global food supply (per capita) has steadily increased.

Global Food Supply Per Capita

As we move towards a world of food abundance, let's look at a few of the fun areas of transformation and entrepreneurial opportunities.

Food Production:

Bioprinting of Meat: Modern Meadow is a Singularity University company that uses bioprinting (tissue engineering and 3D printing) to grow meat (beef, chicken & pork) and leathers in a lab. Their vision is to do this at scale and dramatically reduce the environmental impact of meat production. In 2012, it took 60 billion land animals to feed 7 billion humans. In success, bioprinting of meat (beef, chicken, pork) has huge advantages: 99% less land, 96% less water, 96% fewer greenhouse gases, and 45% less energy.

Genetically Engineered Crops: We will increasingly rely on genetically engineered crops. In 1996 there were 1.7 million hectares of biotech crops in the world; by 2010, the number had jumped to 148 million hectares. This 87-fold increase in hectares makes genetically engineered seeds (GEs) the fastest-adopted crop technology in the history of modern agriculture. After 30 years of research, a great many of our fears about genetically engineered products have been quieted. More than a trillion GE meals have been served, and not a single case of GE-induced illness has turned up.

Vertical Farming: We will grow our food in AI-controlled vertical buildings, rather than on horizontal land. Vertical farms will be immune to weather, so crops can be grown year-round under optimal conditions. One acre of skyscraper floor produces the equivalent of 10 to 20 traditional soil-based acres. Employing clean-room technologies means no pesticides or herbicides, so there's no agricultural runoff. The fossil fuels now used for plowing, fertilizing, seeding, weeding, harvesting, and delivery are gone as well. On top of all that, we could reforest the old farmland as parkland and slow the loss of biodiversity. Companies like FarmedHere, Green Sense, and groups like MIT's CityFARM are making strides in the field.

Food Production Closer to Home: The average American foodstuff now travels 1,500 miles before being consumed. As 70 percent of a foodstuff's final retail price comes from transportation, storage, and handling, these miles add up quickly. As a result of vertical farming and genetic engineering, production will become decentralized and distributed, allowing food to be produced nearer to the location of consumption, and the price of food to plummet.

Plant-Based Meat Alternatives: Beyond Meat and Hampton Creek Foods are companies turning plants into foods that look and taste just like meat and eggs. Hampton Creek's data scientists are actively weeding out billions of proteins from hundreds of thousands of plants to learn what could form the equivalent of a chicken's egg. The company is seeking to create the largest plant database in the world.

Food Preparation:

3D Printed Food: Companies like 3D Systems, Natural Machines, Print2Taste, and others are experimenting with 3D printed food. While 3D printing in chocolates and sugars is well underway, we'll soon see 3D printed starches, proteins (and even new proteins like algae and insects) and spices.

Personalized Nutrition: Our genome, microbiome, and even our blood type determine how we respond to certain foods/nutrients. Imagine if a 3D printed meal was custom produced depending on the amount of exercise you had that day, and your vitamin blood levels. Advanced biosensing will drive your diet and close the loop.

AI-Designed Recipes: IBM's Watson uses machine learning to construct new recipes and cocktails that no human chef would come up with. This algorithm matches foods based on extensive taste profiles and the chemical makeup of those edibles in their database. We tried a few of Watson's cocktails at last year's A360: Hoof-n-Honey Ale (veal stock, grilled beef and IPA), Plum Pancetta Cider (bacon and cider), and Corn in the Coop (old fashioned with chicken).

Food for Fuel, Not Pleasure: For those that opt-in to optimize their consumption (often at the expense of "taste"), we will have mixtures that will provide us with exactly what our bodies need in terms of nutrients, carbohydrates, protein, and more. Companies like Soylent and Ambronite are already doing this. These options will be cheaper and faster than traditional consumption practices – and they will feed many who don't have access to food at all.

Food Delivery:

Food On-Demand: Press a button and food will be at your doorstep in minutes. PitchBook Data reports that companies involved in delivering groceries and meals in the region attracted $433 million in funding last year. That's up from about $68 million in 2013 and only about $21 million in 2012. Companies like Uber Fresh, Munchery, and many others deliver high-quality, restaurant and chef-prepared food to your doorstep on demand.

How are you going to capitalize on the changing food economy?

As technology converges, the future will be a tasty, and abundant, one.

Let's Create a World of Abundance

This is the sort of content and conversations we discuss at my 250-person executive mastermind group called Abundance 360. The program is highly selective and has ~89% of the spots filled. You can apply here.

Share this email with your friends, especially if they are interested in any of the areas outlined above.

We are living toward incredible times where the only constant is change, and the rate of change is increasing.

From here

4/26/15       #21: Angel investors ...
lean futurist

Why wouldn't we just bioprint people who didn't need food?

4/26/15       #22: Angel investors ...
Pat Gilbert

Metabolism is kind of like minimum wage, there is no way around it.

Unless of course you want to start using robot bodies that maybe run on thorium and have to be fueled once a year.

4/27/15       #23: Angel investors ...
lean futurist

While we are bio-printing could I put in an order for a three-armed cabinetmaker? That sucker could build cabinets! One arm to hold the board, one to hold the screw and one to run the battery drill.

Could I also get one of the arms to digitally display the cabinet drawings? Would probably want to be on the arm that holds the screw.

4/27/15       #24: Angel investors ...
Pat Gilbert

Why not 8 arms? also have them CNC precise to a few .001

4/27/15       #25: Angel investors ...
Lean Lean Futurist

Actually Pat in the same way we dispense with the cow and just grow the steak we could dispense with the manufacturing altogether and just plant memories directly into the cortex module.

It's kind of fuzzy but I basically recall landing a 50lb King salmon while receiving a..............."

4/27/15       #26: Angel investors ...
Pat Gilbert

All truth comes from Start Trek, the replicator for the food and an X rated holodeck for the other, of course for it to do much good you could not have the robot body.

4/27/15       #27: Angel investors ...
Mel

Lets keep in mind that some of the first 3-d printing marvels were burgers and dongs. Not quite Earl Grey, hot.

Aside from that lovely thought--if we are to divert back to economy--we service Vancouver, Whistler, etc. Ever heard of the housing there? Second most expensive in the world. Those people are also buying kitchens. And renovated through the recession.

Some of you may occasionally wonder why my guys are still in business. Despite massive disorganization, they are busy as heck. Sometimes up to month late (yes you read that right) yet still super busy through even the deadest of seasons. Going super strong.

There's gotta be a difference, Dorothea!

4/27/15       #28: Angel investors ...
tim schultz

Ooooo! Got me a fancy new pseudonym!!

Heheh :)


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