Entrepreneurial

– Adam Hoeksema is the founder and CEO of startup consultancy firm ExecutivePlan. This article appeared on Under30CEO. The views expressed are his own. –

For most entrepreneurs these days, funding is nearly impossible to come by.

According to the report titled, “Important Things for Entrepreneurs to Know about Angel Investors” and distributed by the Angel Capital Education Foundation, only 1 to 4 percent of applicants successfully raise angel investment capital. So before you ruin your chance at securing investors, make sure you have not committed any of the following deadly mistakes.

1. Wait until you need it. So many entrepreneurs make the mistake of waiting until they need the capital “tomorrow” to begin the process of seeking funding. Make no mistake about it, the process of raising capital can take months and months. Even a simple loan will require enough paperwork to kill a small tree. Ironically bankers and investors are more likely to provide you with additional capital when you don’t need it. So don’t wait until you have an immediate need to begin the funding process.

2. Submit a full business plan. Another great way to get your funding application thrown in the trash is to submit an unsolicited, full business plan. An investor or banker is not going to waste two hours to read through an entire business plan with your initial funding request. Submit a short executive summary, then if you are asked to submit a full business plan – great. Just don’t start with your business plan.

3. Claim “conservative” projections. It can be a major turn off to some investors and bankers when you call your financial projections “conservative.” Of course you think your projections are conservative, but the fact of the matter is that many, if not most, businesses fail within a few years of launch. If every entrepreneur’s projections were truly conservative, then why are so many small businesses unsuccessful at reaching their projections? Don’t let yourself sound ignorant. Simply state your projections and let the bankers or investors make their own judgment.

Move over venture capitalists, there’s a new sheriff in town: the angel investor.

As VC and private equity firms pulled back from the number of deals they made with entrepreneurs during the recession, it appears angel investors – wealthy individuals funding startups on a much smaller basis – have moved in to pick up the slack.

Last month Fast Company ran a blog titled, “Angel investors more powerful than VCs“, wherein author Brian Javeline, the founder and CEO of MyOnlineToolbox.com, stated angel investors “who used to promote entrepreneurialism have been acting more like traditional VCs.”

Lee Lin had a full-time job, three rental properties and a problem: he had no time to find tenants to live in them. He tried advertising on free-listing websites like Craigslist, but found it too time consuming, so he created an alternative.

Lin and co-founder Lawrence Zhou, both former programmers, spent nine months and $20,000 in personal savings to build RentHop.com. The website showcases available apartments in New York, predominantly ones that don’t charge renters expensive broker fees.

“Landlords and property managers are very desperate now,” said Lin, who added that when the rental market tanked it forced landlords to absorb broker fees as a way to try to entice renters. These “no-fee” apartment listings have become extremely popular with New Yorkers. “The bottom line is the recession is driving landlords and brokers to work harder to find tenants and that makes room for a new site and a newer business model, such as RentHop to come along.” (Read full article here)