Why Start the Sheltowee Business Network?

By Alex Day

SBN Node Leaders Bryan Welage (Cincinnati) and Bobby Clark (Lexington) with CEO Alex Day

Can you name one organization that is solely devoted to the needs of entrepreneurs?  I have had a hard time identifying one group that has a national presence that is solely devoted to helping entrepreneurs grow their businesses.  There are some great groups out there, like Tech Stars.  But even Tech Stars is more devoted to "tech" startups than entrepreneurs in general.  I was encouraged by people to start the Sheltowee Business Network (SBN) because there is a need to help entrepreneurs.  SBN is based on a paid membership model that offers the levels of Mentors, Experts, Angels, Entrepreneurs, and Explorers.  As an Expert member you may be a subject matter expert, but not an entrepreneur.  All contributions to our startup community are welcome.

 

The goal of the Sheltowee Business Network is to help grow and start entrepreneurial businesses.  You may ask, "shouldn’t that be 'start' and 'grow' rather than 'grow' and 'start'?"  I think it is important to point out that we are targeting successful entrepreneurs who have started and grown businesses as well as new entrepreneurs.  So it is important that these experienced entrepreneurs be able to grow their businesses, so we can help others start their business.   

 

Historically here in Louisville, KY most of the organizations that are around to help entrepreneurs are...     continue reading  


ABOUT US
THE SHELTOWEE BUSINESS NETWORK in conjunction with the SHELTOWEE VENTURE FUND is a member driven-network that helps entrepreneurs start and build businesses.

Our Core Values are:
1. Help others
2. Always act in a kind, ethical and transparent fashion
3. Honor those who assume the risk
4. Expect a financial return from your interactions

Become a member of the network!  Go to:
www.sheltowee.com/join

Five Things to Know About Getting Involved in Angel Investing

By Alex Day

Making money by investing in early stage companies has generally been reserved for the ultra wealthy through venture capital funds.  Early stage companies (or Startups as they are known) represent an equity class that is not understood by many people, and not available to many people.  Unfortunately, for those few who do attempt to invest in this asset class, they often have a bad experience because of an extreme lack of experience. 

Financial advisors and professional service providers such as attorneys and accountants do not recommend investing in this asset class.  And most of the time this is wise counsel.  The due diligence that is required to invest in an early stage private placement of equity is beyond the capability of novice investors and can often result in bad investments.  As someone who has been investing in this asset class for several years, I wanted to point out some of the reasons you should consider getting involved in angel investing, and providing some pointers on how to do it. 

1.       Entrepreneurial companies can have strong societal impact.  Early stage entrepreneurs are often times quite visionary and see things that most people just cannot see.  This allows them to push through barriers and accomplish things that can have a great positive impact on society.  Supporting these entrepreneurs as an angel investor provides the opportunity for you to make money, and also have a strong societal impact.  And following and getting involved with entrepreneurs can be a lot of fun.

2.       Make it an investment strategy.  If you are going to get involved with investing in early stage companies, be sure that this becomes a part of your financial planning strategy with the intent of providing positive financial returns.  I don’t recommend approaching it as a hobby (although you can still have fun doing it), because it can become a very expensive hobby. Let your financial advisor know that you want to dedicate some of your high risk funds to this area.

3.       Utilize a portfolio approach.  As with so many things in the finance world, angel investing is...     continue reading  

UPCOMING SHELTOWEE EVENTS IN LOUISVILLE
RAISING CAPITAL WORKSHOP for Entrepreneurs.  Paid membership to participate.  10 AM to 2 PM on Saturday, July 13.
INTRODUCTION TO ANGEL INVESTING.  3 to 5 PM on Wednesday, July 17.
SBN LOUISVILLE MEETING.  3 to 5 PM on July 18.  All business professionals welcome.  Membership required after 2 general meetings.
Events will be held at iHub Co-working space, 204 S. Floyd St, Louisville
Register for these events at www.sheltowee.com/events
Submit Partner Events at www.sheltowee.com/eventform

How to Make Raising Capital Easier

By Alan Grosheider, MetroStart Founder

For the last several years in Louisville, MetroStart (formerly Metro Startup Launcher) has worked to make it easier for startup companies in our area to raise capital and get started. With a lot of trial and error, we believe we have figured out a much easier way for startups to raise capital. The same method allows investors to invest smaller amounts and spread their risk, which statistically produces huge returns compared to typical stock market returns. 

As we have worked to build the audience for MetroStart over the last couple years, we’ve heard a lot of common themes: 

  • “It’s really difficult to raise the first $25,000 to $50,000 for startups that need a small amount of cash to get started.” 

  • “No one wants to be the first investor to help me get my concept off the ground.” 

  • “After raising my initial chunk of capital (sometimes even hundreds of thousands of dollars), we just can’t seem to find any additional investors.” 

  • “All the serious angel investors say they are tapped out.” 

And, from the investor side, we’ve heard similar things: 

  • “I don’t want to be the first investor on someone’s idea.” 

  • “Come back after you have proven your concept.” 

  • “Come back after you have traction in the marketplace.” 

  • “Come back after you’re profitable.” 

  • “I invested $25,000 in a startup one time, and I lost all my money. I’m not doing that again.” 

Not only does this lack of very early stage capital lead to less startups, this means that ...     continue reading  


 AN SBN POINTER:

What is an accredited angel investor?

Sources: MillionaireDoc.com and Wikipedia

If you meet an accredited angel investor, you know they have the funds to invest in your company or startup.  Although they usually are, angels do not have to be accredited investors as designated by the Securities and Exchange Commission (SEC). Accredited individual investors, as defined by the SEC, have to make at least $200,000 in income for two years, and have at least $1 million in assets (exclusive of their home residence).  The broader definition of an investor is loosely defined as a person that allocates capital with the expectation of a future financial return.  An angel investor is known as an affluent individual who provides capital for a business start-up, usually in exchange for convertible debt or ownership equity.

Accredited individual investors, as defined by the SEC, have to make at least $200,000 in income for two years, and have at least $1 million in assets (exclusive of their home residence).

How does one become an accredited investor?  There is no exam. In the United States, the definition of accredited investor is put forth by SEC in Rule 501 of Regulation D. An entity is an accredited investor if it is a private business development company or an organization with assets exceeding $5 million.

Accredited investor types generally look for higher rates of return in private placements and want ...     continue reading  

SPOTLIGHT INVESTOR:

Lessons Learned from Phil Mason, a Louisville Investor

by Dawn Marie Yankeelov

A common question from entrepreneurs in Louisville is “Where are the angel investors?” Many, like Louisville’s Phil Mason, are hiding in plain sight. Phil Mason, an area angel investor, has been a regular attendee at area organizations interested in entrepreneurs for about 40 years. He currently attends Venture Connectors, the Sheltowee Business Network, and LEAP (Louisville Entrepreneurial Acceleration Partnership) meetups for angels, for example. He quietly takes note of entrepreneurs with new ideas as he travels the city doing his own business consulting, via MCO Business Advisors, LLC, which he founded in 1991. (He started his first business in August of 1973.) His background in business runs from retail to marketing to proprietary education, to modeling agencies to hotel brokerage to temporary employment agencies. The investments that he recalls quickly are those involving inventions, like underwater electrical tape, dry kiln operations, and ethanol production. Innovative companies that he worked with in recent years include: Frogglez Goggles , (Prospect, KY); Surclean (Brighton, MI), stripping paint from primer; and Berrycare Toothpaste Gum, for cavity prevention (Paris, KY).   

At this point, he has invested in almost every type of business, with more than 80+ startups crossing his path and actually receiving funding. He has been described as “quiet, friendly, and reserved,” and will take time out to speak to the dedicated entrepreneur looking for a path forward. While in hotel management, he performed valuations on limited service and full-serve hotel properties in several states, including Kentucky, Indiana, Ohio, Tennessee, Georgia and Florida. 

And, for entrepreneurial ventures where he didn’t take an equity position, he has done business evaluations, management services and facilitated sales of the business. 

He says his lessons learned include the following ...     continue reading