Entrepreneurs seeking capital should be on the lookout for angels-not the heavenly variety but earthbound individuals with a high net worth looking for potentially profitable investments. Some 30 to 40 organizations nationwide help match business owners with these investors using computer databases.
At the Los Angeles Venture Network (LAVN), based at the University of Southern California, entrepreneurs pay a $200 onetime charge and provide a business plan and financial information.
"After reviewing this, we list a company in the database and screen them to see if there is a match with an investor," explains Jon P. Goodman, LAVN developer. Angels, who pay a $200 annual membership fee, are individuals with a history of investing.
Entrepreneurs are kept on the database for 12 months and are rescreened each time a new investor comes online. If no match is made within that time, business owners can resubmit a modified business plan to stay online. For information, contact the Business Expansion Network at (213) 743-1726.
Like LAVN, most angel networks are affiliated with colleges or universities or can be located via economic development organizations in your community. Other networks of note:
The Technology Capital Network at Massachusetts Institute of Technology backs companies including high-tech, agricultural, biotech, energy and manufacturing; call (617) 253-7163.
The Capital Network at the University of Texas, Austin, introduces investors to companies based on mutual business interests; call (512) 305-0826.
Pacific Venture Capital Network, an outreach program of the University of California, Irvine, targets high-tech and high-growth companies; call (714) 509-2990.
Save It For Later
Proving that bigger isn't always better, a growing number of financial services companies are establishing employer-sponsored 401(k) retirement plans for small firms.
The Principal Financial Group in Des Moines, Iowa, offers two programs-the Pension Provider contract, typically used for firms with lower assets (which make a $10,000 annual contribution or more) and 25 or fewer employees; and the Flexible Investment Annuity (FIA) program, typically for companies with more than 25 employees and a greater asset base (which contribute at least $50,000 annually).
Costs vary depending on your business but can be as low as a onetime $350 application fee and an annual administrative fee of as low as $1,160 for the Pension Provider plan. The FIA plan, which generally yields higher returns, has a onetime $825 application fee; other charges depend on the plan's assets and number of members.
To find out more about how these plans can help provide for yourself and your family, call The Principal Financial Group at (800) 543-4015, ext. 88126.
The Rating Game
Ever wonder how you stack up against your competition? A new service from accounting specialist Padgett Business Services could provide the answer.
Called Reality Check, the program averages 15 characteristics, including sales, cost of sales, wage and rent expenses, net profits and pricing, to produce a benchmark financial statement for an industry.
Padgett president Roger Harris says Reality Check statements cover 100 different industries, primarily service and retail businesses. The data, culled from Padgett's 350 offices nationwide, reflects the company's clientele (mostly firms with 20 or fewer employees).
"This report enables you to look into the future and see what was done, how you compare and what you need to do better in the future," says Harris. Statements are provided monthly to Padgett customers at no extra charge.