This Angel Doesn’t Lie (But find out what I really think about that business!) (c) 2009. Paul G Lewis, LLC. ALL RIGHTS RESERVED

This Angel Doesn’t Lie (But find out what I really think about that business!)

(c) 2009. Paul G Lewis, LLC. ALL RIGHTS RESERVED.

Serial Entrepreneurand

Angel Investor

I do not have an MBA, CPA, or any advanced degree.

I apply what I have learned in business to investment decisions.

Disclaimer: This presentation is based on my personal style and does not necessarily reflect how others make investment decisions.


The first capital I ever raised

• Raised capital in one meeting

• Investor made 600% in the first day


The first capital I ever raised

• Raised capital in one meeting

• Investor made 600% in the first day


Experience as an Entrepreneur


MC²

Formed while a student at FDU

Invested my life savings: $200

Didn’t know the difference between AR and AP

Grew into a global company (5 Continents)

Strategically acquired in 1999 by NYSE:VOL

LESSON LEARNED: If you BELIEVE, you can ACHIEVE


GetgoMail.com

Launched in 2000

Raised $1.4M on a bad Executive Summary

IPO in 2001

Crashed and burned in 2002 (and my stock was still restricted)

LESSON LEARNED: There is not much value to restricted stock


CardXX

Purchased defunct company and became CEO

Negotiated out of $3M in debt

Established operations in Denver

IPO in 2003

LESSON LEARNED: A dead business can turn around if it is positioned properly


PG Lewis & Associates

Had a vision: LITIGATION colliding with TECHNOLOGY

Laws changed to require “e-discovery”

Became #1 in our industry

Strategically acquired in 2006 by NYSE:RHI

LESSON LEARNED: Change creates tremendous opportunity


1998 1999 2000 2001 2002 2003 2004 2005 2006

MC²Acquired byNYSE: VOL

GetgoGoes PublicOut of Cash

CardXX

Goes Public

PG LewisAcquired byNYSE: RHI

1998 1999 2000 2001 2002 2003 2004 2005 2006

LESSON LEARNED: Do not have 4 kids in 5 years (if you like to sleep.)


Why I became an Angel Investor

• I want to help by sharing what I’ve learned• I want to have fun

(hobby)

• I want a return on investment

(business)


Due Diligence

My initial questions


Do you have skin in the game?

No. That is why I need an angel!

Yes. If this does not succeed, I am ruined.


What does your family think about your idea?

They think it is GREAT!

They think it is TERRIBLE!


Do you have a plan on how to become profitable?

Not yet.

Of course!


Do you have an exit strategy?

What’s that?

Yes. I am going to become #1 and go public!

Yes. I have identified a possible future acquirer.


Do you have a business plan?

Yes, but it needs work.

Yes. It includes 5 years of projections.

Not really.


Raising Capital

RULE #1

Whenever possible, use your own money


Before Looking for an Angel

• Make sure your business is healthy• Know exactly how much capital you need and

exactly what it will be used for• Be prepared to part with a big chunk of equity• Consider an angel at inception or shortly

thereafter• You do not necessarily need to be profitable to

attract an angel…


Must Have’s

• Be prepared• State exactly how much you are looking to raise

and exactly how you will use the money• Know exactly what you are willing to give up in

return for the investment• Be specific• Be 100% honest…


Must Not Have’s

• Don’t lie• Don’t be desperate• Don’t ask the investor how much he wants to

invest• Don’t paint a rosy picture• Don’t hide anything…


What I say vs.

What I am Thinking


“Would you like to see my business plan?”

“Sure!”

(Not really.)


“We are looking to raise $1M”

“And how will you use the funds?”

(Obviously, you have never done this before.)


“We are going to use the funds to hire a sales staff and increase marketing efforts.”

“Can you be more specific?”

(You are already doomed…)


“As CEO, I plan on taking a modest salary until we are cash-flow positive.”

“How much do you intend to take?”

(Do you know we are not on MARS?)


“We are a Web-Based marketing company.”

“That sounds interesting.”

(How do I get out of this conversation.)


“We are a cross between eBay and Google”

“You are?”

(You are killing me.)


“We plan on introducing 48 new product categories in Year 1”

“That sounds like a lot.”

(That sounds like a lot of bull and you have no focus.)


“We are raising capital to repay the original investors and to reimburse the founders for

loans made to the company.”

“That does not fit my investment criteria. But, good luck!”

(I heard Bernie Madoff is looking for a cell mate.)


“I have a very crazy plan to disrupt an existing industry through greater efficiency

- and that is what the customer wants.”

“That doesn’t sound crazy to me!”

(I like it! How can I help?)


Final Word


Q&A?

Email me: [email protected]



Documents

This Angel Doesn’t Lie (But find out what I really think about that business!) (c) 2009. Paul G Lewis, LLC. ALL RIGHTS RESERVED