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www.HartfordBusiness.com • October 23, 2017 • Hartford Business Journal 13 THE RAINMAKER Six considerations when seeking angel investment By Ken Cook L ots of early stage businesses are popping up these days. And for many en- trepreneurs, finding an angel investor is an important part of the growth of the company. After all, angel investors can be very valuable, both for their money and expertise. With these considerations in mind, here are six things to think about to help determine if an angel investor is in your future. 1. Most angel investors are involved investors. These are usually high-net-worth individuals who have an interest or passion for a particular industry or type of business. They have had a successful past with similar businesses, and are looking to capitalize on their expertise and leverage their capital. Entrepreneurs need to recognize this fact about angels, and understand that taking angel investment capital is akin to taking on a partner. An angel investor's capital buys them access and influence. The entrepreneur needs to be open to someone else influencing, and in some cases even making decisions in their business. 2. Angels look for unique- ness. They want to invest in someone and something that has a strong potential for significant growth. Leveraging capital in a high-risk investment means that the upside potential return, coupled with the strength of the management team, offer a strong possibility of significant double-digit returns in three to five years. These types of returns come from compa- nies that offer a unique value to a particular marketplace. The uniqueness can come from many different sources. What's impor- tant is that it is sustainable, and difficult to copy. 3. Angels are not crutches. If a business is in need of capital, and the reason behind this is poor practices on the part of the own- ership and management team, the possibility of securing angel investment money is very slim. Angel investors are not look- ing to invest in mistake-riddled environments. If you seek angel investment capital, make sure that your business opera- tions and management practices are solid. 4. Angel investors also have their own unique place in the spectrum of capital sources. In the earliest stages, businesses are most often funded through the owner's own capital and the capital of friends and family. It is rare that an angel inves- tor will put money into a pure startup. The primary exception to this is if the business has a completely unique product that requires research and development. Intellectual property that you can pat- ent in the form of a product can attract investment capital, particularly if you can substantiate the market potential for the product. 5. Entrepreneurs also need to recognize that securing angel investment is a time- consuming process. First and foremost, there needs to be a solid business plan that clearly and succinctly lays out the vision, goals and steps to be taken to turn ideas into reality. Supporting the business plan are financial projections backed by substan- tive market research, if not real live market data. Once the business plan and financial projections are solid, the business owner then needs to find the angel investor. 6. Be specific in how you go about searching for an investor. Ask your con- tacts in the accounting and legal profes- sions. Ask other owners who have secured investment capital. Look for angel invest- ment groups where the investors operate together to screen and analyze investment opportunities. Bottom line — Angel investment capital is valuable for businesses on the verge of some strong growth potential tied to uniqueness. Recognize that it is a "partnership" in some ways, and the process of secur- ing the investment capital can be long and very time con- suming. Ken Cook is the co-founder of How to Who, a program on how to build strong relationships and how to build business through those relationships. Learn more at www.howtowho.com. HARTFORDBUSINESS.COM POLL LAST WEEK'S POLL RESULT: Ken Cook NEXT WEEK'S POLL: Is Hartford a viable market for a professional soccer team? To vote, go online to hartfordbusiness.com BIZ BOOKS Shadow work that saves and wastes time and money By Jim Pawlak Shadow Work — The Unpaid, Unseen Jobs that Fill Your Day by Craig Lambert (Coun- terpoint Press, $16.95). Soaring per- sonnel costs and new technology have shifted jobs from employees to customers. In the not-to-distant past, making travel arrangements involved calling an airline's reservation customer service rep. Now, you make them online because you'll have to pay extra if you have a customer service rep make them. We don't complain much about doing the work previously done by others because internet sources offer multiple choices and find the best deals. We know jobs have been displaced; we also know that adding mul- tiple choices for consumers has spawned job growth in other areas. The internet also offers transparency because it democratizes expertise. How? 1. By making their tools available. Example: You can obtain many fill-in-the-blanks tax preparation and legal documents online. 2. By showing you how to repair and build things. YouTube is filled with instructional videos. We're willing to spend our time to save our money. 3. By demystifying their jargon. Example: You don't have to rely on the expertise of your doctor to explain ulnar neurop - athy and treatment options. A few mouse clicks finds a wealth of information. While this can help us make informed decisions, it can also open up Pandora's Box because we're not knowledge - able about ancillary health factors that influence diagnosis and treatment. In the workplace, democratization of expertise means that we're doing jobs that were once the domain of lower-level ad- ministrative support staff. Software allows us to type and send documents, schedule meetings, make copies, etc. We screen our calls via voicemail options. Does the shadow work that's crept into our jobs make us less productive? Probably. In my corporate days, my administrative assistant took shorthand dictations, and quickly typed up drafts for review and final versions — leaving me free to focus on other priorities. When that position was elimi- nated, I had to hunt and peck at the keyboard, which changed my priority timeline; the change trickled down to my staff. As a result, work/life balance was affected. We spent more time at work and less time at home. The bottom line: Time isn't fungible. Some shadow work saves time and money; some wastes time and money. Jim Pawlak Book Review Is bankruptcy the smartest option for the city of Hartford? 19.4% No 80.6% Yes READER COMMENTS: "Yes. Absolutely. Bite this bullet now, then move on!" "Even if the state bails them out this year, they will need it year after year." "It's likely the only option. Hartford can't move forward unless and until it is reorganized and a reasonable plan is fashioned for its future. The state is broke. Asking the state for a bailout is untenable." Angel investors are not looking to invest in mistake-riddled environments.