Some businesses don't need "angel" money or don't need very much.
One of my tenants wanted to start a small brick-and-mortar store. He needed $30K to get inventory, and he could only get a bank loan for $15K. He was glum and depressed one day, and I suggested to him "have you considered equity financing?"
The next day he came around and asked me if I was serious -- I told him I'd chip something in if he got others to. I bought $2K worth of shares, and other people, like the leader of his coven, bought shares too.
Now, from my perspective, the $2K meant that he was going to keep paying the rent, and I could lose that much money if the apartment was vacant for a few months, so it's a pretty risk free proposition. If I cashed out now, I'd get at best a small capital gain, but I wouldn't have done any better in the stock market.
Of course, I'm not a "serious" investor and I wasn't systematically thinking about how to make money -- but this gives some idea of the scale of investment that's required to succeed at a "lifestyle" business and how it's just not worth it to somebody who's already rich...
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For a current venture I'm thinking a lot about finding "investors" who are interested in payments in kind that can be delivered quickly (a year or so;) Roughly, I'm looking for a certain kind of "investor/customer" who can pay me $10k now, expect to get $20-40k worth of value over the next year, and leave me with an asset that generates $2-5k a year worth of cash flow. This "moving revenue backwards in time" makes a big chunk of my balance sheet weightless, could let me grow fast w/o sinking in a lot of my own capital... And rather than diluting my equity, it incorporates the "voice of the customer".
One of my tenants wanted to start a small brick-and-mortar store. He needed $30K to get inventory, and he could only get a bank loan for $15K. He was glum and depressed one day, and I suggested to him "have you considered equity financing?"
The next day he came around and asked me if I was serious -- I told him I'd chip something in if he got others to. I bought $2K worth of shares, and other people, like the leader of his coven, bought shares too.
Now, from my perspective, the $2K meant that he was going to keep paying the rent, and I could lose that much money if the apartment was vacant for a few months, so it's a pretty risk free proposition. If I cashed out now, I'd get at best a small capital gain, but I wouldn't have done any better in the stock market.
Of course, I'm not a "serious" investor and I wasn't systematically thinking about how to make money -- but this gives some idea of the scale of investment that's required to succeed at a "lifestyle" business and how it's just not worth it to somebody who's already rich...
------
For a current venture I'm thinking a lot about finding "investors" who are interested in payments in kind that can be delivered quickly (a year or so;) Roughly, I'm looking for a certain kind of "investor/customer" who can pay me $10k now, expect to get $20-40k worth of value over the next year, and leave me with an asset that generates $2-5k a year worth of cash flow. This "moving revenue backwards in time" makes a big chunk of my balance sheet weightless, could let me grow fast w/o sinking in a lot of my own capital... And rather than diluting my equity, it incorporates the "voice of the customer".