Wing And A Prayer Sock it away, the perfect proposal, earth angels, loans in a

Angel networks are forming in locales around the country toidentify small businesses worthy of financial blessings. Frominformal breakfast groups to broker-forged entities, these networksfill a need among high-tech start-ups that have exhausted theirpersonal financial resources--family, friends, credit cards--butdon't yet qualify for venture capital funds. However, theoperative term here is "high-tech," virtually a universalcondition for this type of angel funding.

AngelMoney.com (http://www.angelmoney.com), anangel network in San Diego, is one such entity. It's made up ofa group of private individuals who invest their own money, inamounts ranging from $50,000 to $500,000.

"There are more than 60 groups like this operating in theUnited States, and many more around the world," says ChuckTeel, co-founder of Business Angels International (http://www.equityinternational.com)in Portage, Indiana. The 2-year-old company publishes TheInternational Directory of Venture Capital Networks and BusinessAngel Networks 1999 (U.S. edition, $39.95, available at the Website).

Another breed of angel network is emerging among structuredfirms. Like securities firms Spencer Trask & Co. in New YorkCity and StoneGate Partners LLC in Boston, more and more financialconsultants, merchant bankers and other executives are forgingangel networks. StoneGate, for example, assembles groups of 10 to15 angels to invest in high-tech/high-growth businesses in NewEngland.

"These are smaller companies that have outgrown thecapabilities of individual angel investors," notes KennethWolfe, StoneGate's managing director and co-chairman. Thebroker-dealer considers privately held companies with a proventrack record and significant growth potential fueled bytechnological change, preferably at a point where productdevelopment is complete and funding is needed to ramp up productionand expand sales and marketing. When such an investment opportunityis identified, StoneGate arranges financing of $3 million to $5million in expansion capital in return for a 20 to 40 percentequity position for the investor group.

Finding structured angel networks takes detective work; you canresearch firms online or contact brokers and ask if they areinvolved with or know of any angel networks.

Freelance writer Paul DeCeglie(MrWritePDC@aol.com) is a formerstaff reporter for Journal of Commerce and AmericanBanker.

Save Now, Play Later

You probably could afford to eat out more often than you do,splurge on luxurious vacations or move into a nicer place in abetter neighborhood. But if you're like most people your age,chances are you've decided to sacrifice in all three categoriesin order to set the savings aside for retirement.

Far more savings-conscious than past generations, Americans 34and under are preparing for retirement earlier than ever before andwith an unmatched zeal, according to a survey by Roper StarchWorldwide Inc., sponsored by Lincoln Financial Group and Moneymagazine.

According to the survey, nearly two-thirds (64 percent) ofAmericans aged 18 to 34 are saving for retirement. Almost half (44percent) began saving for retirement before age 25, and 18 percentbefore they hit 20. In contrast, more than one-third of currentretirees didn't start saving or investing until they were morethan 40; the average baby boomer started at age 27.

In general, 18- to 34-year-olds believe it's important tosacrifice immediate pleasures to achieve long-term goals. To savemoney, 45 percent are willing to eat out less, 44 percent to investaggressively, 33 percent to cut back on vacations, 32 percent tobuy less-expensive housing, and 25 percent to take a second job.People tend to become less willing to make such sacrifices as theyage, the survey indicates.

Despite their efforts, 62 percent of 18- to 34-year olds areconcerned that they are not saving enough, tying them with babyboomers (61 percent) as the generation most dissatisfied with theiroverall rate of savings. (Only 35 percent of retirees expresseddissatisfaction.)

Uncertainty about the future of Social Security is fueling theconcerns of the younger generations, suggests Jon Boscia, presidentand CEO of the Lincoln Financial Group of Companies (a subsidiaryof Lincoln Financial Group) in Fort Wayne, Indiana. Says Boscia,"The rules have changed as the outlook for both SocialSecurity and Medicare has deteriorated."

The survey also reveals that 62 percent of respondents aged 18to 34 agree with this statement: "One of my biggest goals inlife is to have a lot of money." Agreement with this statementdeclines consistently with age; only 27 percent of those 65 orolder concurred. People over age 65 also expressed a high degree offinancial contentment: 79 percent of retirees say they arefinancially comfortable, even though many manage on 50 percent oftheir pre-retirement household income--an amount less than thetwo-thirds of the pre-retirement income recommended by mostfinancial advisors.

Time To Propose

By George M. Dawson

Q:We are going for outside financing. What format do yourecommend for our proposal?

A:That's the wrong question. Concentrate on content, notformat. Regardless of format, all financing sources requiredetailed answers to seven questions. For the first four questions,your answer is the same for all financing sources: ?.How much moneydo you want? 2. What will you do with it? 3. Why do youneed our money to do it? 4. Why is this loan/investment goodfor your company?

For the last three questions, you answer differently for alender than an investor: 5. When will you pay us back?6. How will you pay us back? 7. What happens if somethinggoes wrong?

1. How much money do you want? Show thenumber immediately. Why waste time if your needs aren't a goodfit with the financing source? Be exact. Don't low-ball or pad.Neither strategy works. You'll lose credibility if you'reexposed.

2.What will you do with it? Buy assets, pay forrevenue-creating expenses, buy out an investor or retire otherdebt? Include a legal description of real estate, total history ofdebt to be refinanced, number of units to be added to inventory,software costs, research and development budgets, contractor bids,or anything else relevant to your reason for seeking the loan.Banks don't like to make "unproductive" debtconsolidation and equity buyout loans.

3. Why do you need our money? If the fundsare to fix a problem, is it a good problem, such as sales growth,or a bad problem, like inefficient management of receivables? Witha bad problem, include your solution to fix it so it doesn'thappen again. No one wants to finance an inefficient oruncontrolled business.

Answers to the last four questions will appear in nextmonth's column.

George M. Dawson (gdawson@txdirect.net) is asmall-business consultant and author of Borrowing to Build YourBusiness: Getting Your Banker to Say "Yes" (UpstartPublishing, $16.95, 800-235-8866). E-mail your questions tobsumag@entrepreneurmag.com

A Loan That Fast?

You can now apply for a business loan online and be approved (orrejected) in less than a minute and in the comfort of your ownoffice. If approved, you then have the luxury of shopping the sameWeb site for the best rates and terms among participating lenders.It's all part of LoanWise (http://www.loanwise.com), a newonline loan center designed specifically for entrepreneurs.

Small-business owners needing anywhere from $5,000 to $100,000simply sign on and fill out a short loan application that takesless than five minutes to complete. You need not produce taxreturns, annual reports or your first born. Your application isprocessed immediately--free of charge--and you receive an answerwithin seconds.

LoanWise--with lending partners that include American Express,Irwin Union Bank, Bank of Hawaii and Security First NetworkBank--wasn't making start-up loans when operations began lastsummer. However, the company expects to offer such funding byyear-end.

The online loan service was launched in a strategic alliancebetween NetEarnings Inc., an Internet-based small-business financecompany in Burlingame, California, and Fair, Isaac and Co. Inc., aSan Rafael, California, firm known for its pioneering work incredit scoring. The two firms previously introduced CreditFYI.com,a service that provides instant business credit reports over theInternet.

Contact Sources

Lincoln Financial Group of Companies, http://www.lfg.com

StoneGate Partners LLC, (617) 330-9009