Got an angel investor- What to do now?

[superiorword]

Hi everyone,


One of my old friends is working in a bank and I'm having an account with that bank. I was in the bank today, and my friend introduced me to his uncle. He's UK based....a rich person- has a long list of businesses(restaurents, exports, real estate etc.). My friend told him about my business and how I have been running a successful translation company without any business background. The old man was very impressed and told me that he's interested in breaking into some sort of online business (he's doesn't knows much about internet though).


After a brief meeting, this guy told me that he wants to invest a very small amount of money- an amount of US$ 3-4 million () if I have a solid business plan, and asked me what percentage I would charge for consulting. He trusts me, but at the same time wants to earn profit fast and wants assurance that the amount he's going to invest should not go into negative even if the business fails LOL(he didn't tell me this directly, but I clearly noticed this in his way of discussion). So I simply told him that I'm already busy with my work and have very little time to think and work on some new business plan.


Just a few hours back, my friend called me. He told me that his uncle really wants me to work with him as he thinks I'm the only one he can trust for his business expansion in the internet world. It's making me think seriously about his offer....


Please let me know if there are any ideas you would like to give. Also, if anyone here has a good business plan, please feel free to contact me(with a non disclosure agreement, if confidentiality is an issue). May be we can work something out together and make that "richie rich" happy...as well as earn some nice $$

[Zujo]

With a budget of $3-4mm you could buy a pretty amazing existing website and business. That is the route I would go, rather than starting something from scratch. If you can buy something like a large rakeback site or non-poker affiliate site for 2-3 years of earnings this will be very attractive to him as land based businesses are typically valued at 7-10+ years of earnings. This would also result in a much lower failure rate than you simply sinking a bunch of money into a new venture.

20% of profits I think would be reasonable if you are to consult on the acquisition as well as manage the project. If simply consulting and finding him a deal 5-10% should probably be sufficient.

Good luck

[Mackan]

I have to agree with Zujo here. With that kind of budget I would def. buy something that is already established and making money instead of trying to start something huge from scratch.

[JohnG]

That sounds like a very interesting proposal that you definetely should not pass up. With that large of a budget, I agree with what has been said you should certainly purchase an existing online business that's already making money.

That being said, if it were me I would definetely recommend one of the proven money-making niches rather than delving into things like social networking, etc. So basically I would present the following markets to him:

• Gambling
• Banking (credit cards, mortgages, etc)
• Payment Processing

Once you decide on the market you want to get into, do serious research on the market including the competition and look for sites that are well-positioned but under-marketed, financed or run by people who can't really take them to the next level. I think this would be much better than buying a super established site as the money you will save buying a mid-level business can be used to bring it to its full potential.

Bascially with a $4 Million budget I would look to spend no more than $2 Million on acquisition and keep $2 Million on retainer to market the site, pay employees, etc.

From there, sky is the limit depending on which direction you want to go. Anyways hope that helps and good luck!

[MJ]

I would be looking to buy multiple established earners with that kind of budget personally. Look for six figures buys that earn appropriate income and don't have translations done.

Easy way to multiply the earnings quickly.

[Zujo]

I would be looking to buy multiple established earners with that kind of budget personally. Look for six figures buys that earn appropriate income and don't have translations done.

Easy way to multiply the earnings quickly.

Ya even better idea. Spread the risk amongst multiple sites. If he wants online gaming you could buy a CPA/Bonus site, a rakeback site, a news site, a forum/portal etc. You could probably increase profits 20%+ simply by being able to negotiate better terms with the poker rooms due to the added revenue/combining affiliate accounts (though talk to them first, while you have the power. They aren't much willing to negotiate once you already have all of the traffic/sites/referrals in your possession. Approach them early and get agreements that if you hit X target you get Y return, even if it comes from purchasing existing affiliate accounts etc).

[Graham]

I simply told him that I'm already busy with my work and have very little time to think and work on some new business plan.

You must be making crazy money to turn down an offer to be part of a mutli-million dollar investment.

[superiorword]

You must be making crazy money to turn down an offer to be part of a mutli-million dollar investment.

Haha It's really hard to think about something altogether new, and working hard to make it a success alongwith managing a decent money(not crazy money ) generating business



Long story short, I only have experience in the translation industry and success in one field doesn't necessarily mean you would make it big in any other field.

[PokerNations]

If you don't have the time to write up a new business plan, why not hire someone to do it for you?

I would think the 3-4 million investment would be worth your while to utilize a professional to create your business plan, with some consultation/input on your end, just formatted in the appropriate manner to present to this investor

[Jeremy]

Hey SuperiorWorld,

I have a good buddy that has a complete business plan written up for a venture in the affiliate industry that encompasses being a full scale service provider to affiliates. He is also in India and a successful entrepreneur. Let me know if you want to be connected and I can get the two of you introduced.

Anytime you can leverage others money to make you money, you should take advantage of it.