Angel Investors: 7 Online Business Plan Scams and 1 Real Deal

We've all seen the hype: "We'll put your plan in front of thousands of investors!" "We'll write you an award-winning online business plan!" "Only $3,000 for thousands of investors to learn about your company!"

I cringe every time I see one of these ads. Vultures are preying on honest business people who want to fund their businesses. Here are some ways to spot them:

1. "Only qualified investors see your business plan." Yeah, sure. And who "qualifies" them? Have a friend try to sign up as an investor (that part is usually free). How is she "qualified"? Is there a background check? Does she submit a financial statement? Odds are that she will be asked to do nothing more than sign a statement that she has a certain net worth. That's no "qualification" in my book. So who are these "investors"? Who knows. One could be your strongest competitor.

2. "You approve anyone who sees your business plan." Okay. So what are you going to do to qualify the potential investor? Are you going to run a background check? ask for ID? ask for tax returns? or just be so happy that anyone wants to see your business plan that you jump on the idea? (That's how these scams get away with charging thousands of dollars -- too many entrepreneurs are desperate for funding.)

3. "It's only $500 (or $300 or $100) to register." What does it matter if it's free? If it is diverting your time and energy and resources away from finding a viable investor, it's not worth it.

4. "Your idea is great, but we need to put it into our format. This will only cost $800." Don't walk -- run from these guys.

5. "Your idea is so great that we want to invest $2,000 in it." (That's after you spend $5,000 to put it into "their" system.) Do I really need to comment on this?

6. "Talk with a satisfied customer, or 2 or 3." Here's this entrepreneur who just got $2 million in funding, and he has nothing better to do than sell the web scam to you? Trust me, entrepreneurs who just get funded barely have time to eat, let alone talk.

7. "Look at all these written testimonials." This is harder to disprove because the testimonials look so real -- even the companies might be real. But unless the testimonials, and the companies, can be verified independently, I wouldn't trust them. And I'll lay odds that they cannot be verified independently.

There is one huge exception to this: ACE-Net (http://activecapital.org). This is more properly the Access to Capital Electronic Network run by venture capitalists, institutional investors and individual accredited investors. It was developed by the U.S. Small Business Administration's Office of Advocacy to encourage the creation of a national marketplace for investors to find and invest in equity offers by small companies.

ACE-Net isn't for all companies. Those seeking under $1 million will probably find the paperwork daunting. Those seeking over $5 million won't qualify. There are special qualifications, and of course lots of forms to fill out -- but nothing like the forms required for a formal initial public offering.

But for those who do qualify, it's an amazing tool in raising financing. Spend some time with the website and the forms, and see if your local SBA office can put you in touch with another company that went through the process.

As with any investor tool, don't rely exclusively on ACE-Net. Use it in conjunction with your personally developed targeted funding search. This, combined with an exceptional business plan, doesn't guarantee success but it places your company head and shoulders above all the rest.

MaryAnn Shank

http://www.businessplanmaster.com/investors.html ; http://businessplanmaster.blogspot.com

Ms. Shank is a seasoned business financing specialist.

---

Google News Updated : Sun, 06 Jul 2008 06:55:22 GMT Analysis: McCain struggles to regain footing - The Associated Press The Associated Press Analysis: McCain struggles to regain footing The Associated Press - 2 hours ago WASHINGTON (AP) - John McCain calls himself an underdog. That may be an understatement. The GOP presidential candidate trails Democrat Barack Obama in polls, organization and money while trying to succeed a deeply unpopular fellow Republican in a year ... Rural voters lean to the GOP St. Joseph News-Press Neither Obama nor McCain meets Energy Party standard The State New York Times - Online Athens - Washington Post - Newsweek all 465 news articles Publ.Date : Sun, 06 Jul 2008 04:40:55 GMT Argentine Lower House Passes Grain Export-Tax Plan (Update3) - Bloomberg Voice of America Argentine Lower House Passes Grain Export-Tax Plan (Update3) Bloomberg - 8 hours ago By Eliana Raszewski July 5 (Bloomberg) -- Argentina's lower house of congress approved the government's plan to increase taxes on exports of grains and oilseeds, risking a resumption of three months of strikes by farmers. Export Tax That Angers Farmers Advances in Argentina New York Times Argentina lawmakers approve farm export tax hike guardian.co.uk RTT News - BBC News - The Associated Press - AFP all 144 news articles Publ.Date : Sat, 05 Jul 2008 22:41:30 GMT McCain Battles a Nemesis, the Teleprompter - New York Times New York Times McCain Battles a Nemesis, the Teleprompter New York Times - 7 hours ago Mary Altaffer/AP By MARK LEIBOVICH LAS VEGAS —Senator John McCain was performing relatively smoothly as he unveiled his energy plan. McCain Campaign, in Relaunch, Seeks Tighter Message Focus Wall Street Journal McCain Campaign on Obama and Iraq FOXNews The Associated Press - Washington Post - Los Angeles Times - CNN all 737 news articles Publ.Date : Sat, 05 Jul 2008 23:31:52 GMT Ore. man completes flight of fancy _ in lawn chair - The Associated Press The Associated Press Ore. man completes flight of fancy _ in lawn chair The Associated Press - 1 hour ago CAMBRIDGE, Idaho (AP) - Using his trusty BB gun to help him return to Earth, a 48-year-old gas station owner flew a lawn chair rigged with helium-filled balloons more than 200 miles across the Oregon desert Saturday, landing in a field in Idaho. Video: Ore. Man Uses Balloons and a Lawn Chair to Fly AssociatedPress Believe it or not, he's lounging on air The Oregonian - OregonLive.com CNN International - BBC News - KOHD - San Jose Mercury News all 1,071 news articles Publ.Date : Sun, 06 Jul 2008 05:50:31 GMT Obama "puzzled" by Iraq comment frenzy - Reuters Washington Post Obama "puzzled" by Iraq comment frenzy Reuters - 1 hour ago By John Whitesides, Political Correspondent ST. LOUIS (Reuters) - Democratic presidential candidate Barack Obama said on Saturday his plan to end the Iraq war was unchanged and he was puzzled by the sharp reaction to his statement this week that he ... Obama struggles to thread needle on Iraq AFP Obama Refines the Blame on Iraq Miscue New York Times International Herald Tribune - Voice of America - Washington Times - New York Daily News all 1,620 news articles Publ.Date : Sun, 06 Jul 2008 05:08:23 GMT Hippie Arrests Draw ACLU’s Attention - New York Times ABC News Hippie Arrests Draw ACLU’s Attention New York Times - 6 hours ago By AP CHEYENNE, Wyo. (AP) - The American Civil Liberties Union said on Saturday that it would investigate the actions of federal officers who had arrested five members of the Rainbow Family in western Wyoming during the group’s annual gathering. ACLU plans to investigate Rainbow Family treatment The Associated Press ACLU to investigate Rainbow Family treatment LocalNews8.com WKOW-TV.com - Billings Gazette - cbs4denver.com - Austin American-Statesman all 306 news articles Publ.Date : Sun, 06 Jul 2008 00:40:38 GMT Smallest planet shrinks in size - BBC News Canada.com Smallest planet shrinks in size BBC News - Jul 4, 2008 The smallest planet in the Solar System has become even smaller, studies by the Messenger spacecraft have shown. Data from a flyby of Mercury in January 2008 show the planet has contracted by more than one mile (1.5km) in diameter over its history. First Results From Messenger's Mercury Flyby Slashdot Mercury is shrinking, NASA craft finds; a cool clue: 'lobate scarps' Los Angeles Times eFluxMedia - Baltimore Sun - Examiner.com - ChattahBox all 155 news articles Publ.Date : Fri, 04 Jul 2008 11:45:26 GMT Data Feed Content for Web Pages Amazon Associate Store

PARLOT::Ebooks, Scripts, Websites, and more...

Adsense websites

Abstract Business Marketing Strategy for the Entrepreneur

If you look at those Corporations in franchising today you... Read More

What Online Millionaires Tell Me They Are Worried About

I just arrived back from the best seminar I have... Read More

The Six ?F? Words Every Entrepreneur Should Know

Start your own business, and soon enough, you find yourself... Read More

Top Ten Ways to Increase Your Profitability

1) Go back to basics. Take a couple of steps... Read More

10 Secrets of Successful Entrepreneurs

Running a one-person business is a creative, flexible and challenging... Read More

Territory Limitations Policies for Franchised Companies

All franchised companies must have Territory Limitations to maintain the... Read More

Profile of Women Leaders

Leadership is based on two words, "pressure and support"and that... Read More

Be Where the Pucks Going To Be

The "Great One" said it bestHockey legend Wayne Gretzky, when... Read More

An Entrepreneur and a Life To Be Remembered

I was reminded of my own mortality today. I guess... Read More

The Myth of Undercapitalization - Six Ways Entrepreneurs Achieve Success in Spite of Start-Up Money

This year more than 17 million people will become entrepreneurs,... Read More

How To Start a New Business

While it is tempting to just leap into a new... Read More

Pre-Money vs. Post-Money Valuation

When a company decides that it must raise capital, a... Read More

Expand Your Resourcefullness!

The success and failure for the entrepreneur is largely dictated... Read More

Are You Sure You Want To Start Your Own Business? Part Two of a Series

Why, exactly, do you want to go into business for... Read More

Is Now the Right Time to Become An Entrepreneur?

A number of economic changes are magnifying the role of... Read More

Walt Disneys Failures Could Inspire Entrepreneurs

You are a struggling entrepreneur and sometimes it feels like... Read More

Solo Mojo for Solo Entrepreneurs --- Where?s Your Juice?

I recently read a magazine article about Andrew, a 42-year... Read More

Your Company Needs A Mission Statement; Make It Count

Does anyone remember that book "Built to Last" done y... Read More

Why Most CEOs & Entrepreneurs Fail?

Times are tough. The economy is in a constant state... Read More

Lessons Learned from One Entrepreneur on Vioxx

For the past ten-months, I tried every drug from the... Read More

The Fear Factor

I recently conducted a lil' survey asking my colleagues what... Read More

7 Small Business and Self Employed Law of Attraction Principles For Success

It is widely held that one of the most important... Read More

Entrepreneurs: Benefits vs. Features-Know the Difference!

Entrepreneurs know their business. They know their product, their service.... Read More

Rx for Falling Corporate Profits

Once again the squeeze is on as renewed inflation worries... Read More

Youve Found Your Guru, Now What?

In my last article, "Follow That Guru", I told you... Read More