Investor Crap Games
By
William Cate
Ask not how much money you'll make from a speculative investment. Instead, ask how likely you are to lose your risk capital. Most investors will find better odds wagering their money in Las Vegas, Macao or Monte Carlo than being angel investors to private companies.
Private company speculation is far riskier than betting on stocks to appreciate in value. Your money will be in jeopardy for years. There's no liquidity in a private company speculation. You can't sell it to another investor! Worse still, if you don't meet your private company's expanding needs for risk capital, the company is likely to fail. Angel investors should reflect on the Uncle Remus' tale of Brer Rabbit and the Tar Baby. The more you put into the company, the more "stuck" you become.
Even if your private company is profitable, you won't recover as much money as you would from stock speculation, because public shares almost always trade at a multiple of the balance sheet value of the company.
A Sensible Hedge
If you are considering risking your hard-earned money in a private company speculation, send us a copy of the business plan for review. If we can't find anything seriously wrong with it, we won't charge you for the review. If we can't suggest ways to reduce your risk, we won't charge you for the review. You have nothing to lose in having us review the business plan. We can usually save you the loss of some or all of your risk capital. If you have invested your money and lost it, we may be able to suggest ways to recover part or all of it.
Public Company Private Placements
As an Accredited Investor interested in high-risk speculations, you are better served risking your money in public company private placements. However, there is no shortage of crooked public company private placement investment opportunities. At best, the U.S. Securities and Exchange Commission may act against the public company swindlers long after you have lost your money. We can help you avoid the swindlers and offer you structuring suggestions that will reduce your risk of loss and enhance your potential profit. The folks seeking money rarely write investment contracts that are favorable to those folks supplying the money. It's usually in your best interests to rewrite the contract before you write the check.
The Semi Swindles to Avoid
You can't win in any speculation where the organizers of the investment opportunity will make money as you lose your money. If you are being offered membership in any sort of venture capital group, club, partnership, mutual fund, etc we can help you determine if the purpose of the group is to make money for the organizers or the members.
Arm Yourself with Proper Tools
We operate a Venture Capital Club [http://home.earthlink.net/~beowulfinvestments/globalvillageinvestmentclubwelcome/]. The speculative tools that we offer our members have uses beyond risking money in Non-American public companies trading their shares in the United States. If you are an accredited investor, consider attending one of our orientation breakfasts.
We offer you a chance to look before you leap into any speculative investment. If you aren't concerned about the losing aspects of most business plans, you won't find the few winners among the many losers. Knowing the risk is essential to winning the game. We can help you recognize the investment risks.
To contact the author email: beowulfinvestments@earthlink.net
About the Author
He has been the Managing Director of Beowulf Investments [http://home.earthlink.net/~beowulfinvestments/] since 1981 and is the Executive Director of the Global Village Investment Club [http://home.earthlink.net/~beowulfinvestments/globalvillageinvestmentclubwelcome/]