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How Not to be a Fallen Angel
Either in Investing or in Giving
An "angel" is someone who invests in a newer business or ministry, providing initial seed money and often her expertise. After carefully considering all the factors and
exercising due diligence, she understands and accepts the risk. Here are some guidelines to avoid failure or disappointment.
1. Make sure it is something you enjoy, understand or have a passion for.
2. Know that your initial investment will likely not be your only investment.
3. Remember that things
take three times as long to complete and are three times as expensive as forecast.
4. When you agree to be on a board, expect your energy and resources to be tapped. Don't join unless
you are willing, able and available.
5. Your investment and involvement should be commensurate with your financial resources and energy, and only what you feel comfortable with. The
exception would be if you really feel God's command on your life to do more. Weigh what you will have to say "no" to if you say "yes" to this. When investing, no more than
10% of your portfolio should be at risk in any given project.
6. Make sure that the investment is in alignment with your age and stage in life.
7. It is better to invest in a
good idea with a great team than in a great idea with a mediocre team. Make serious investments with serious people.
8. Check out the leadership of the organization. Listen to your
intuition and pray as you check out the:
• Character—integrity, values and concern
• Commitment—willingness to weather the storms essential to building an organization
• Competence—track record of the CEO, board members and staff.
Entrepreneurs, though often brilliant and creative, may have a problem in receiving advice and suggestions.
9.
Ask more questions, and then double the number of questions. Build your own criteria and stick to it. Sometimes God does call us to do something outside this, but it is not the norm. With the
gift of earning, He gives the gift of discernment.
10. Protect your own integrity. You are who you associate with. Be careful not to get into situations that can lead to great
liability. Require that the company supply D and O insurance. If you are not comfortable with the situation, but still feel you must be involved, serve in an advisory capacity only.
11. Don't invest in friends just because they are friends. Remember the three C's. It is better just to give money to a friend than to be in a business relationship with them.
12.
There will always be a plethora of ideas and opportunities. In order to make a difference, deliberately choose areas that you are passionate about and invest yourself in them to create an
island of success in the dark waters of failure, instead of just sprinkling crumbs here and there.
From material presented by Bethe Strickland, successful businesswoman in the high
tech industry and co-founder of eClubBuy, an Internet company.
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