Heaven Sent

They're not called angels for nothing.

Michael Cornelius, co-founder of TV Plus Inc., is a case straight from the annals of entrepreneurship. In the one year he's spent getting his company up and running, he's taken a second mortgage on his house, maxed out seven credit cards and given up a year of salary.

Other than his faith in himself--and in his partner, Greg Hall, 51--Cornelius is betting on America's continuing fixation with watching television, and more specifically, on the fact that the more TV Americans watch, the more they want to know what's on the tube. And the more they want to know what's on, the greater the demand for the kind of weekly TV guide TV Plus is publishing in the Tampa Bay area of Florida. The key to the business, says Cornelius, is high quality but inexpensive production, which allows advertisers to roll out advertising programs with the kind of frequency they couldn't hope to match with that other TV-schedule publication.

Now that Cornelius has all the operational kinks worked out, he envisions wider horizons for his company. "We see a national market for our publication, which we can exploit through franchising," says the 49-year-old entrepreneur.

But, as is often the case, the problem comes down to money. To take the company where he knows it can go, Cornelius figures TV Plus needs $125,000 for working capital and start-up funding for his franchise program. Unfortunately, with only one year under its belt, TV Plus isn't exactly "bankable." "Banks aren't an option," Cornelius concedes.

But neither are the investors at the other end of the spectrum: institutional venture capitalists. The fact is that most institutional investors--if they have, say, $50 million to invest-- don't want to shell it out $125,000 at a time. They want to do 10 deals for $5 million a pop.

The middle-of-the-road option--and the one which is best for entrepreneurs like Cornelius--is angel investors. The reasons are simple: Angel investors are numerous and easy to find; they add value to your business and invest for reasons other than economics; and they're often connected to additional money. Angel investors are, perhaps in 99 percent of all situations, right for your business.

David R. Evanson's newest book about raising capital is called Where to Go When the Bank Says No: Alternatives for Financing Your Business (Bloomberg Press). Call (800) 233-4830 for ordering information. Art Beroff, a principal of Beroff Associates in Howard Beach, New York, helps companies raise capital and go public.

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This article was originally published in the May 1999 print edition of Entrepreneur with the headline: Heaven Sent.

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