Comments on: Why so difficult to seek investors for my business? http://venturecapitalmagazine.com/index.php/why-so-difficult-to-seek-investors-for-my-business/ For Entrepreneurs & Venture Capital Investors Tue, 01 Feb 2011 08:59:19 +0000 hourly 1 http://wordpress.org/?v=3.0.5 By: Tim F http://venturecapitalmagazine.com/index.php/why-so-difficult-to-seek-investors-for-my-business/comment-page-1/#comment-193 Tim F Sun, 01 Mar 2009 19:02:44 +0000 http://venturecapitalmagazine.com/index.php/why-so-difficult-to-seek-investors-for-my-business/#comment-193 <a href=""></a> Yours is a very good question and an excellent example concerning how to seek investors. You do not identify the country in which your new business intends to operate, but we assume that it is Indonesia. It is illegal under the laws of Indonesia for a person to advertise publicly for "angels" (investors) in a new business. In addition, it is illegal under the laws of the US for a person to advertise publicly in the US. This a violation of the Securities Act of 1933, which provides that no person may advertise publicly unless the company has filed a Registration Statement with the SEC. Furthermore, even with a Registration Statement on file, any advertisement must include information about the offer or solicitation (e.g. that the offer or solicitation must be accompanied by a Prospectus). To answer your question: why is it so difficult? The answer is that the "angels" whom you seek are themselves very knowledgable and sophisticated (and/or they have sophisticated investment advisors). These angels know that it is illegal to advertise publicly like this, so they assume that -- if you violate these securities laws -- you are not the type of business partner that they would want to do business with. So, with this background, we recommend that you go about seeking investors in the legal and proper way. Start by writing a very detailed business plan, including detailed financial profections. Also, obtain the assistance of qualified solitors (attornesy), accountants, bankers and other consultants and advisors. After all, you may know everything about your particular business, but none of us is an expert in everything. The secret for success is not to know everything but to surround yourself with advisors who do. Most start-ups need money just to prepare a business plans and to gather a qualified board of advisors, and this money is called "seed capital". You may have to dip into your personal savings and borrow money from your bank, your family and even your friends. (It is illegal to advertise publicly for such money.) Hope this helps.

Yours is a very good question and an excellent example concerning how to seek investors.

You do not identify the country in which your new business intends to operate, but we assume that it is Indonesia.

It is illegal under the laws of Indonesia for a person to advertise publicly for “angels” (investors) in a new business.

In addition, it is illegal under the laws of the US for a person to advertise publicly in the US. This a violation of the Securities Act of 1933, which provides that no person may advertise publicly unless the company has filed a Registration Statement with the SEC. Furthermore, even with a Registration Statement on file, any advertisement must include information about the offer or solicitation (e.g. that the offer or solicitation must be accompanied by a Prospectus).

To answer your question: why is it so difficult? The answer is that the “angels” whom you seek are themselves very knowledgable and sophisticated (and/or they have sophisticated investment advisors). These angels know that it is illegal to advertise publicly like this, so they assume that — if you violate these securities laws — you are not the type of business partner that they would want to do business with.

So, with this background, we recommend that you go about seeking investors in the legal and proper way. Start by writing a very detailed business plan, including detailed financial profections. Also, obtain the assistance of qualified solitors (attornesy), accountants, bankers and other consultants and advisors. After all, you may know everything about your particular business, but none of us is an expert in everything. The secret for success is not to know everything but to surround yourself with advisors who do.

Most start-ups need money just to prepare a business plans and to gather a qualified board of advisors, and this money is called “seed capital”. You may have to dip into your personal savings and borrow money from your bank, your family and even your friends. (It is illegal to advertise publicly for such money.)

Hope this helps.

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