Witching Hour

Friday, November 3, 2006 at 04:31pm by Evan Prieskop in Start-Ups

Keep up with Elise and her story of becoming a successful entrepreneur:

“I am not sure I believe you.”

Sean laughs brightly, charmingly. “Believe what you want, I still want to see your business plan.”

The party was a rousing success. The first few hours passed in a whirl of music and conversation. Elise was allowed to talk to many new people about her store. A mountain of clothing donations piled in the corners of every room of the house.

Now, hours past midnight, Elise is sitting on the roof with Sean, a new acquaintance and attentive listener who has been drawing her out about her store for some time. Finally, he sprang a surprise on her. He offered to give her the startup capital she needs.

“People don’t just give total strangers tens of thousands of dollars to start a business.”

“Actually, people do. It’s called angel investing.”

“Like venture capital?” Elise knew all about venture capital investors; she had approached several of them in the early days of her store’s desperate search for funding before she finally had to admit that her business was simply not attractive by the standards of VC firms.

Sean shrugged. “Yeah, basically. But with less paperwork. No boards of directors, no advisory committees, no contact agents. Just you, me, and my checkbook.”

Elise grinned. “You do this often? Wandering up to strage girls at parties and offering to make their dreams come true?”

Sean laughed again. “Pretty much, yeah. I received a windfall when I was twenty. I got just enough money to be dangerous and had just enough brains to know that I couldn’t let it just sit around. I don’t have the head for math or the trust in New York strangers needed to go the stock market route, so just invested in a friend’s business idea. It worked out. It’s been eight years and I make far more money than I loose. I love doing it this way, socially, through people I meet and friends of friends.”

“So, what have I got to do?”

“Well, I want to see your business plan. I want a look at your financial projections. I want to see the site you picked out…and I definitely want to meet this Dave guy who is mentoring you through the process.”

“And if you like what you see?”

“If I like what I see, we will talk brass tacks. Given how much you need I will probably demand a percentage of the business, rather than just loan terms. We can work out the details while sitting over your financials. Don’t worry about the details right now. I just want to talk in broad strokes.”

“Ok.”

“You say you have a drumhead tight plan for a $25,000 startup. Just theoretically, what do you think you might do differently if you had $35,000?”

“Oh, I know exactly what I would do with that…” Elise began excitedly, because every entrepreneur knows what he or she would do with extra money.

Next week: A question of control

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