Would $100,000 help get your Internetbased business off the ground? Investor Angels (IA) is offering seed capital and highpowered support to startups whose proposals are selected for development. IA launched its Web site in 1998 in search of a few viable concepts. "We were hit with hundreds of proposals from visionaries all over the country," reports David Cook, founder and CEO of the Hollywood Beach, Florida, company.
Cook, a seasoned entrepreneur with management and hightech experience, says IA will select proposals with the best potential and provide those businesses with everything they need--like startup funds, business plans and help going public. "If your plan is sound, Internet-focused, and you're committed to making your business a success, Investor Angels will be there for you," Cook promises.
To maximize the number of startups financed and developed, Cook is taking IA public with an SEC Regulation A offering. "We plan an IPO of 5 million shares in [December 1999]," he said at press time. "Each shareholder will be able to vote on which business proposals to pursue." At the initial virtual proxy meeting, the first 40 proposals to win more than 51 percent of the votes will be financed and developed. "Shareholders may also purchase preIPO shares in each venture, affording them the opportunity to participate financially in groundbreaking businesses without the need for the traditional [investments of] $100,000 to $200,000," Cook adds.
Once a proposal has been selected by IA's angels, IA forms a subsidiary corporation to develop the concept. IA streamlines the incorporation, bylaws, minutes, tax registration, corporate-banking facilities and Employee Stock Ownership Plan. After receiving the seed capital, the management of the new subsidiary completes the business and marketing plans; registers the trademarks, patents and copyrights; and registers a prospectus to raise operating capital.
"Each step of the way, [entrepreneurs] are guided by angels on an accelerated path more compatible with the growth demands of Internetbased businesses," says Cook. "On their own, most Internet visionaries don't [know] how to start or run a company."
Cook should know: In a previous life, he performed due diligence for major investment banks. In three days, Cook would do a top-to-bottom technology assessment and determine the startup's chances for survival in the marketplace, then spend three weeks on corporate due diligence to determine who owned the company-or if a company even existed at all. He uncovered a variety of blunders, such as misfiled incorporations, negligent tax registrations, use of the wrong business name, and--his personal favorite--articles of incorporation that banned the company from operating in its existing business.
Says Cook, "Our goal is to do all that messy corporate stuff and do it right the first time so the visionaries can focus on winning the race. We like to think of it as 'Business incubation at cyberspeed.' "
Paul deCeglie is a former staff reporter for Journal of Commerce and American Banker.