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Liquidity event:<\/i> Name at least five companies that might be ready to acquire the enterprise if successful.\u00a0 On the flip side of success, which companies or individuals are most likely to want to buy whatever is left of the company if it is unsuccessful?<\/p>\n
[Email readers, continue here…]<\/span>\u00a0 Metrics and management:<\/i> What might be the first indication the company will not be able to achieve its goals and objectives?\u00a0 When and under what conditions should the CEO and management of the company be changed?<\/p>\n Valuation and fund-raising<\/i>: How did you arrive at your proposed pre-money valuation?\u00a0 Has this been tested with investors?\u00a0 Who else has been approached to provide funds? What will the proposed managers of the enterprise do if the project does not proceed?Management experience and skin-in-the-game:<\/i> What has been the experience of the founders and managers in past ventures?\u00a0 Will you and your managers plan to invest cash on the same terms and conditions as you ask?\u00a0 Would you and your managers invest funds, if loaned to them by the investor or others, in the enterprise on the same terms and conditions as is being proposed to the investor?<\/p>\n Profit potential:<\/i> What is the proportionate profit potential relative to cash investment between the investor(s) and the managers in the event the business is as successful as is predicted?\u00a0 What is the single most important event you expect to foresee for success, and what will happen if it does not occur when anticipated?<\/p>\n As most human endeavors fail to achieve the results originally hoped for the above questions are fair and reasonable \u2013 because your angel investor is being asked to accept your forecasts and event predictions to entice him or her to invest in your enterprise.<\/p>\n Arthur Lipper has been a well-respected member of the international financial community since 1954. He has served as advisor to and member of numerous financial exchanges, and was the founder and CEO of Arthur Lipper Corporation and co-founder and Chairman of New York & Foreign Securities Corporation. Today he serves as Chairman of British Far East Holdings Ltd. He has written numerous books and articles for entrepreneurs and investors, and was the publisher and editor-in-chief of Venture Magazine.<\/i><\/p>\n","protected":false},"excerpt":{"rendered":" \u00a0By: Arthur Lipper In the process of raising funds to create and develop a business, entrepreneurs make many statements to those they seek to attract as investors. In my years of investing, I\u2019ve developed a set of tough questions that … Continue reading