Inside Secrets of Angel Investing with expert, Karen Rands

Good day, good day, good day everyone. How are you? This is Bernadette Boas and yes indeed you are talking with Shedding the Bitch Radio. We have a great program today. Those of you who are listening, you can't see me obviously, but at the same time, those of you who go out tomorrow onto our Shedding the Bitch YouTube channel, I am in studio with our guest Karen Rands. She's going to correct my pronunciation of her name in a minute. I saw that on your note about Karen or—

oh, because phonetically how do you say Karen? K-Ron.

Yeah, K-Ron.

Oh, okay. That's my festival nickname.

Okay, another time. Unless we have time, then we'll dig into it. Welcome back everyone. We are talking to Karen Rands and I actually love her descriptions. I want to be her, actually. I aspire to be a venture capitalist. She's a compassionate capitalist, which we're going to talk about, an economist, an investor, and entrepreneur. She is the leader and advocate for the compassionate capitalist movement. She believes entrepreneurism is the greatest source for wealth creation. You don't have to be successful entrepreneur to create generational wealth. If you can learn how to invest in those companies that have the potential to be the next best thing, according to Karen. So she is the founder and CEO of Cougaran Capital Holdings, a consulting and advisory firm for entrepreneurs and investors, and right here in Atlanta, but she works all over. From 2001 to 2012, she managed and rebuilt the network of business angels and investors to be one of the most active angel investor groups in the Southeast. Notable national recognition and has morphed that into the national network of angel investors. So today, over 2,000 investors have participated in some aspect of Karen's investor education offerings and have over 5,000 that have attended her events seeking to meet with invest— I'm sorry, to meet with entrepreneurs that have compelling investment opportunities. Furthermore, over 1,000 entrepreneurs have benefited from Karen's teaching and coaching, many of them applying that knowledge to their business strategy and capital raise activities. Her clients have raised over $60 million combined and created hundreds, hundreds of jobs according to what we've been able to track. Karen has been a frequent speaker, or is a frequent speaker and mentor within numerous small business and economic development initiatives and was the recipient of the Advocate of the Year Award in 2016 at the Flight to Freedom Summit in San Ramon, California for her work to promote compassionate capitalism. Karen resides outside of Atlanta, Georgia with her family, and she's here in studio with me. I'm so excited. How are ya?

I'm good.

We've known each other for quite a while. 2009?

Yeah, I think so.

2009? Right around there? Because ladies, I'm just gonna give you a brief little thing. I'm not an angel investor. However, the minute I went out on my own, I said, you know what, I need to learn about this thing called capital raising and really understand it and then even network with the types like you because that's a way of then when I do need help and support, right, then I have already a network. Is that what you recommend to even entrepreneurs starting, growing, expanding?

Yeah, you need to always think through your—

who—

that one-degree separation. And so it's who do you know, and then who do they know. And so it's— I mean, it's— you always are building your network. And, you know, in the corporate world, people know that because it's the job security, because you can always find and land someplace else if something happens and you need to get another job because of who you know. Right. Well, and it's the same thing when it comes to raising capital, because when you establish personal credibility within a framework of a network, when you start to talk about that you have this great big project or you're investing in a great big project that you have believe in, you bring that personal credibility to your network to at least have the additional conversation.

Right. Well, I'm also going to throw out there too, we might sound as if we're talking to entrepreneurs and business owners, but those corporate professional women that I have listening on a regular basis, Don't take for granted or don't assume that you don't need to know about this because I even learned in my corporate career as I was going up the ladder, I was getting more and more involved with our acquisitions and mergers. And it really was beneficial for me to have some degree of knowledge around capital raising and how to deal with investors. And if I were— I didn't have to go into any meetings in corporate, but I certainly had to understand what does it mean to acquire money, raise money, let alone companies and whatnot. So, yeah, and as women, it just really added a notch to my whole kind of resume that I actually had all that merger and acquisition experience by the time I left corporate and didn't need to necessarily lean on it for corporate, but I definitely lean on it for business. All right, so let's make sure everyone is clear on what angel investing is and what it means and all that kind of good stuff.

Okay, so you, for people like you and I and some of the other people that we know in the world of entrepreneurism or, you know, on the investing side, we take it for granted that people know this term angel investing. And I did, I mean, I had never heard it before I left my corporate job. No. And came in and kind of jumped into raising capital for a company that had been my client, and I was going to go raise capital for them because I kind of thought I knew what that was about, and I didn't. And, you know, discovered the Angel Investor Group that I took over and started my learning process at that point in time. And it wasn't— and I actually talked about in the book, The Making of a Compassionate Capitalist, because I met this very successful executive, a very successful executive. He was the president of a— and CEO, or was the CEO of a US operations of a foreign-owned company in the agricultural space. And I met him at a networking thing, and he saw on my resume— I mean, on my business card— venture capitalist and angel investing, and he was like, "What's that?" And he was actually talking to his financial planner at the time about kind of getting himself financially structured so he could leave his cushy corporate job and go either acquire a business or start a business because he wanted that. He was bored with his job, right? He was making money. And so he got the original version of this. This is many years ago when I wrote just some ebooks on it, you know, some chapters, and started learning about it and became this angel investor. And I was stunned that the financial planners of the world, the ones that really should be advising companies on this, never talk about angel investing. It's almost like it's, you know, the words that won't be said or something like that.

Well, it's taking money out of their pocket.

Yeah. And there's FINRA, which is the regulatory environment for the SEC, has kind of created an environment where it makes it fearful for those wealth managers to talk about that. And so bottom line is that angel investing is— was started many years ago by people that were patrons of the arts. And so they were called— they were called—

High net worth people.

And they would invest in a play or something like that, and they were angels to that. And then it morphed over the years through the dot-com that we know about when people discovered— and regulatory changes, it's always about regulatory changes. Changed it where people could put private money into companies before they go public. And so it has always taken on the name of angel investor because, you know, you're looking for money and they're an angel to give you money. But a lot of times you've also heard of Shark Tank, right? Everybody's heard of that.

There are devils out there too.

Those are angel investors too. But more common terms that some people hear when I'm advising companies, I'll say, because some of the people that may invest in their deal may not have ever heard of angel investing or may have had a negative connotation to it. 'cause they think it's gambling or it's really high risk. So they'll be silent partners in a deal. Or if you've ever read Robert Kiyosaki's Rich Dad Poor Dad book, the cash flow quadrant, if you think about the right side of the quadrant, what is it? It's business owner and investing. And his whole thing is making your money invest, it work for you. So owning pieces of multiple companies, you're in effect an angel investor. And then making those investment dollars work for you. And my goal is to make people think about it shift the paradigm. So the same way they think about wanting to add real estate to their portfolio, they'll want to add private stocks of private companies to their portfolio as a wealth creation strategy.

Well, one thing that I thought was interesting that we talked about before we got on the air was, um, and you kind of mentioned it, is, you know, you have all these corporate, um, baby boomers right now, and they've made a lot of money, and it, you know, and Now they want to leave corporate and leave the man and start a business of their own. Well, another strategy could be that instead of going out and starting your own business, and you know, 9 out of 10 businesses fail within 10 years, well, what you could be doing is actually getting educated, engaging someone like a Karen, and actually your business strategy is around buying or investing in businesses, investing in businesses like she said, that builds a portfolio just like you would your financial planner or real estate portfolio around businesses and therefore become an angel investor. Now, is there a monetary limit?

Okay, so traditionally angel investors have been— had to have been what they called an accredited investor, and that's a term that the SEC uses, and it's based on a certain level of income and net worth. And in general, it's, you know, rule of thumb, $250,000 as an individual income for the last 3 years or $350,000 as a joint income and $1 million in assets that's not your primary residence. And so that was kind of where it was. That's why when I— in the introduction, 20 years ago, the only people that invested in real estate were the high net worth and institutions. Well, the same thing on the angel investor side. Okay, so that's the great democratization of the capital markets because now really the rules change through the JOBS Act. So it goes to like the 3 ways that you could raise capital from strangers. There's crowdfunding that people have heard of. It's called Reg CF.

Indiegogo and who's that?

Well, it's a, those are, Indiegogo and Kickstarter are not equity-based. So, equity—

Equity is the one that's equity-based then?

Well, they're independent. They're registered with the SEC. Those are ones most people think of as crowdfunding, but those are reward-based or donation-based. And off the top of my head, I think there's— I can't think of the ones off the top of my head. And those people that are my partners on that would go, shame on you, Karen. But anyway, so—

We'll cut that part out.

Yeah. Send me a question on that. I'll tell you who they are. Anyway, so in almost every state, last I looked, it was on the books of every state. It may not have been fully implemented yet. But every state has what they call— and Georgia does too— Interstate Crowdfunding, which says you can raise money from your people within your state if you're incorporated in that state or have your primary operations in that state. I looked it up just recently to see if Delaware Incorporated could still do it, and you can as long as your primary operations are in that state. And the Reg CF that finally got through allowed people to go beyond their borders and raise kind of within that and raise money outside of the borders on a national basis. And there's some variations depending on state, so you may want to, you know, look into that. But basically, anybody that makes $100 grand can invest in those kind of companies. It's up to 10% of your income, but it caps out at like $2 grand per deal. That's the Reg CF. Then you have your other ones, which is a variation of a Reg D offering. For the record, it's 506. Those are only accredited investors and they have to provide evidence that they're accredited investors.

Okay. But, and so go learn all about that. Okay? So just get educated on angel investing. But the question that I really wanted to hit on was, because I want them to read your book, even if they're not an angel investor, if you're even thinking about being, or you're an entrepreneur thinking about raising money, or you're not even there yet, or you're there, or you're an angel investor, I want you to read her book. I want you to get this book because it'll give you those inside secrets as to what it's all about and what angel investors are learning and reading and therefore what you would want to arm yourself with.

Yeah, there's a 30+ page glossary in there.

That's what I figured. That's what I figured.

It's like 300 terms and everything you need to know for the merger act world or the angel investor world or, you know.

Right. So the question though I have is, Is there a kind of a limit of investment that an angel makes versus like a venture capital? Like, is it maximum of $250,000, $1 million, $5 million that an angel investor would make versus a venture capital or somebody else?

Okay, before— can I do one more thing before I answer that question?

Sure, sure, sure.

Because I have to do the third one is Reg A+. And that's the one that's like the big sleeping giant. It is the— there is no reason to do a— so for your listeners that are owners or active in a big, bigger company, maybe they're $3, $4, $5 million in revenue, they always— they got this new product they want to come out. They'd be like, oh, you know, if we could only raise $10 million, we could do a whole launch campaign for this new product and we could be a $30 million company and get ready to be acquired, right? Well, where do you go raise that kind of money? It's hard within the traditional angel sector if you're that far along to do it, and if you've taken a long time to get there, you're not going to get from VCs, and you're too small for private equity funds. So the Reg A+ is the secret, kind of like the Trojan horse to do that, because you could raise money from anybody. Same limitations, $100 grand kind of a deal, so it's unaccredited and accredited, and your existing shareholders can also participate in selling their stock. If they've had the stock for 2 years at the same time at whatever your offering is, you can raise up to $50 million over the course of a year. Wow. And you get 6 months based on the filings you have to do, you can roll over to be a public company after 6 months if you complete your filing process.

Wow, I didn't even know that.

So it's like a— it costs some money, but not as much as going public.

You have to spend money to make money, people.

But it's a very exciting stage and not that many people are doing it. To your question, which is, is there a particular level that makes an angel investor versus— So there's not a cap on it. It's not like a max that you can invest. It's just really subject to what the company's offering and how much shares they're giving up and how much money they're raising. On average, an accredited investor that participates in angel investor groups, you know, these networks that are around the country.

I've talked about Rich Group and—

Right. They'll on average invest $25,000 to $50,000. $50,000 of their own money on a given deal. And so that's sort of the industry standard.

Their own personal money. Right.

But one of the key things, and one of the things I point out in the book, and I was actually— JP Keddie commented, or KP Reddy, anyway, he commented on Twitter about this, that he's been an angel investor, that people get involved in angel investing and a lot of times they'll do one deal. And then they— the odds of them losing their money is actually quite— you know, you gain experience over time. But just like with any stock, any kind of investment portfolio, you need to have a strategy that expands and you diversify within your strategy of including that so that you have— my recommendation is at a minimum, you need to figure out how much you have the ability, how much money you have to invest over the next 2 to 3 years and a commitment. So take that up, divide it by 5, that's your minimum investment because you need to have a plan to invest in at least 5 companies or don't even get started.

To then overall make money off of it. Right.

Or don't even get started. It's just like investing in real estate. It's a pain in the you know what to invest in one property and manage one property as income-producing. You have to have a strategy that says you're going to add to your portfolio over time to kind of gain an abundance of that. That's the same thing when it comes to angel investing. So you could start out as a crowdfunder investor because that's your thing, but have a strategy that over time— and one of the things that a lot of people don't know about, because that's with people that are in corporate positions, they usually have a big fat 401 that has some matching from the company and stuff like that. Well, you can roll that over into self-directed IRAs the same way that you would invest in real estate out of a self-directed IRA. You can invest in private companies the same way, right? So you could build it in there tax-free for your retirement. That's kind of part of the generational wealth. And there's a whole bunch of tips in the book about how to do that kind of a thing and how to do— compared to real estate investing and get a revenue stream, you know, an annuity if you will, and versus like the flip or something. So there's lots of different strategies.

And I just noticed— and then we'll take a brief break— but I just also noticed a quote on the front of her book, which you can get on Barnes Noble, Amazon, and everywhere you buy books. But it's from Mark Cuban. She mentioned Shark Tank, and we know those guys. But, uh, always wake up with a smile knowing that today you are going to have fun accomplishing what others are too afraid to do. Very nice, very nice. All right, Inside Secrets to Angel Investing with Karen Ranz. Before we go, are you going to that— Daymond Johns is in town.

Oh, is he in town again?

Yeah, tonight I'm going. Daymond from Shark Tank. Again, I always want to learn about pitching and, you know, what kind of feedback from folks like him, angel investors. One thing, and the one thing that I love about Karen, and we never really talked about this because she and I really don't think gender, but there's very few women from an investing perspective, and let alone from an angel investing and venture capital investing and all those other things. Sure, do they invest in the stock market? Probably, because like it's self-directed or it's directed by someone. And so I've always respected Karen and applaud her and her doings because of the fact that we women— the reason why I wanted her on the show We need, you need to get educated about this. It sounds intimidating, it sounds a little bit overwhelming. You're probably rolling your eyes going, "What are these people talking about? Because I don't have money and I don't think about investing in companies." It's not as scary as you think if you engage someone like a Karen to educate you and lead you along the way. And you get her book. Inside Secrets of Angel Investing.

And there's— with the book, you get access to a portal that has sample term sheets, due diligence checklist, how you decide what kind of company— do they meet your measurements, the minimum criteria for a company. So you get a lot of tools to help you in the journey.

Even just getting educated, I'm telling you, it's a huge business imperative and advantage of you over everybody else in the room, whether at corporate or in your own business. Um, even at home, because you could be a stay-at-home mom and you have some disposable income, a nice amount of it, and just are like, okay, what can I be doing with it? So that's why we want to get you educated. All right, we're going to take a brief break, and when we come back, we're going to continue this conversation. And because I need to know what a compassionate capitalism or capitalist is. We'll be right back. Welcome back everyone online listening to us via BlogTalkRadio, or if you're going and checking us out on YouTube on our Shedding the Bitch channel, you'll see our lovely faces. As I have Karen Rands in the studio and we are chatting angel investing, private equity, getting you smart around where you can build your wealth because it's not just traditional ways, especially women, think about building wealth. All right, so I've always gotten intimidated, I will say, and always had a question about compassionate capitalism. It sounds nice, but at the same time it's like, ooh, capitalism. So describe for everyone what that is very simply, I hope.

Yeah, so it's funny, exactly right, when it's on my card people say, oh, Can those go together? You know? So, in a nutshell, it means when somebody invests their money or time or knowledge, resources into entrepreneurial endeavors to bring innovation to market, create jobs, and create wealth. And it came up from— because capitalism is about making money, right? And so a lot of times people will invest in these other classes. To make money, but they don't really move the human endeavor forward, so to speak, right? It's just buying and selling. So they're making money, and that's all well and good, and that's part of what we want to do as we, you know, become independently wealthy, right? But the compassion part of it— so passion, everybody knows that part of being a successful entrepreneur is having a passion for what you're doing. And, um, Warren Buffett has this theory in his investment strategy that says invest in what you know, right? And so compassion means I'm going to take my money as an investor and I'm going to invest it in an entrepreneur that, or a project that I understand and I get that I think this will benefit the world, this innovation can become successful in the marketplace, and I, and I, I see this entrepreneur really being passionate about it. So I am going to not just be a I'm going to be a compassionate capitalist because I'm investing to do all those things within our economy that will grow our economy.

So it's using your heart and kind of matching that up with someone else's passion for an endeavor, an innovation, a project, whatever the case might be that can move the world forward.

And then not just a donation, right?

Right.

It's to create jobs and create wealth. Right. Absolutely. Sustainable business.

Right, right, right. Yeah, not just to help you with your hobby. Yeah, it's all about job creation, capital creation, wealth creation, and economy building.

And that's the movement. That's what I'm— my mission, you know, is, and I'm, you know, before I die, it will be—

long time.

Yeah, yeah, yeah. So, you know, that this will be something, it will become something that people think about, that Millennials that have it, you know, they're changing the way that they look at the world, what's important to them in the workforce and stuff. And they'll drive a cheaper car and save their money and do this stuff so they can go and be a compassionate capitalist, right, as they grow up into the workforce. And then us that are, you know, still looking around at what we want to do, but we don't know if we have the energy to be an entrepreneur. Let me go use my money to partner up with that. For a good cause. It's amazing, as my Angel Investor Group was growing, when people would come in after they invested in something, we'd have a follow-up meeting and stuff like that. The pride that they had because they had invested in something that they could really see a benefit to what it was going to do, an innovation that was going to change a marketplace or change how things were done or whatever it might be.

And so there's a lot of personal pride that comes with also being a compassionate capitalist. Right, right. Well, I want to address this. It's not on my list of questions, but that's okay. That's how I roll. But, um, so something that you just said, you know, when people think and they're listening to this and we're talking investment, we already said that that can be intimidating for some people, and we're talking innovation, that can seem awfully big, you know, and yet they're out there and they've got, you know, a business and they've got a product or service with a passion behind it and, and it might just be something kind of— they don't see it as like innovation. It's not going to change world markets, but it is an important small to big type of initiative. How do you work with your angel investors and even your entrepreneurs to kind of overcome that intimidation factor or that overwhelm factor when it comes to knowing that they should be able to go out there and feel confident to seek out monies based on their passion and their compassion about what it is that they're doing. Does that make sense?

Yeah, sure. So I have this Venn diagram that I use a lot of times in my presentations and education thing, and within that is— it's kind of like that world of angel investing. And so you have what I call the subjective and the objective investor. So you have your subjective investor that has an emotional connection to what it is that what you're doing, and they will kind of overlook some of the other things because they just— doctors are notorious for doing this with biomed products and things like that, right? So people will just invest in stuff, or sometimes it's because the entrepreneur or the relationship— oh, I totally believe this person can do it. And then you have the objective investor. Those are the people that are in the business of investing, and they're going to— in order to get into the criteria that they look for, you have to have all that other stuff that makes it a business. That makes it an investable business. So, it's more than just the emotion and the passion. It becomes this other piece of it. And ultimately, when it comes down to deciding between Business A and Business B and which one they're going to put money in, there will be an emotional element to that decision. But, you know, you have to have both. So, when you start out, you can get by with just passion, but eventually you have to get that other piece of it. And that's the reason why experienced angel investors— when I first The very first version of this, I interviewed probably 100 different investors trying to understand what made them and how they learned how to be an angel investor. And a whole bunch of them told me that they got involved in angel investing because a friend invited them and they did this stuff and they lost money, but they kept at it and eventually figured out how to make money. I thought that was horrible. You know what I mean? It's like, really? That's how you learn how to be an angel investor? Let's see if we can fix that. So that's part of the thing that with all of this advent of the wall coming down between investors and entrepreneurs, and even in the crowdfunding space, you have to think beyond the emotion, and that's part of the goal of the book, so that— because we don't want people to go do it one time, lose their money, and never do it again, right? And same thing when it comes to companies come to me and they want to raise capital, and they'll be a market participant, let's say, versus a market maker, okay? Maybe it's a new way of doing something and they just want to set up a business in their neighborhood or in their community and they don't necessarily want to— they've got a different take on why they're going to be different, but in general there's multiple of other things for them. So, they can still raise capital, but they have to think about it differently in the way they go about targeting who they're going to raise capital and the messaging that they do. And although this book doesn't get deep into kind of that part of the crowdfunding part of it— The crowdfunding. Or that neighborhood crowdfunding, or raising money from your neighborhood. There will be a new, another one. There will be a follow-on that will be on the portal about it. I just had to get the book out. And so it's a whole process that you go through. And if I'm going to be successful in this movement, I have to do not only the ones that have $1 million in net worth and how they do that, but the people that have $300,000 in net worth and are making $100,000 a year. And they want to invest in something down the street because they believe in it for whatever reason, the same process applies of what they need to look at to make sure their 2 grand is as smart money into that business as somebody's $25,000 or $2.5, whatever, $50,000, 50 grand into something else is the same sort of smart money going into that. The amount, the risk according to the level of capacity for risk for either of those groups is the same. The process to making a smarter investment is the same, and this book will give you the foundation for that and the tools.

Right. And, um, so what I love is the fact that all of this knowledge, whether you act on it and become that angel investor or not, just, you can tell from just her conversation with Karen, is that even these words and these lingos and these understandings of terms and concepts, just knowing those things kind of ups your game when it comes to conversing in business or in corporate. So a great segue to the fact that her book is available right now, and I happen to be a very I'm a tactile person, so I like to write and scribble. So it's available in paperback right now wherever you buy books. And then talk to us about the Thunderclap event that you have coming up, because it was a new concept to me. I haven't published a book in a while, and I want to make sure that any of you who might like it from a Kindle perspective can take advantage of it.

Okay. Thunderclap is a service similar in a way to like a Kindle or, I mean, like to a Kickstarter or something like that, in that you have to gain, but instead of raising capital, you're gaining people that believe in whatever it is that your cause is. And then on a specific date, they go and they sign up and they click on Facebook and they authorize it for Facebook and they authorize it for Twitter and they have a Tumblr account, I authorize it for that. And a pre-made post that I've created will go out on a designated day to that group's followers so that it's like a shout, it's a thunderclap, right? It's a shout out all at the same time to draw massive awareness and try to create a viral kind of response to it. And so, because of how Amazon works when they help to promote a book, you give them, you give them exclusivity on Kindle for a period of time, and they all make it available part of their library. So if you're a Kindle Unlimited, you can get it through that program. They bundle it with the book, the printed book, where you can get them for like $2.99. You can get the Kindle with that. So, but, and then they give me 5 days that I can make the Kindle version free. I'm using 2 of those days on August 5th and August 6th using this Thunderclap. So people that go and sign up on the Thunderclap thing, which is— it'll be on the links on the stuff, but if you are familiar with Bitly, it's a shortened link. So it's bit.ly with your two slashes, capital A in Angel, capital I Investing, one word, dash, capital T C. So Angel Investing - TC, TC for Thunderclap, which is the A and the I and the T and the C as caps. And that'll take you to there, and then it'll be really terrific for me to be able to broadcast that out, that this book's available for free, and that you'll be able to go then and get it for free on Kindle. And you know Kindle, you can download the Kindle software and use it on your regular phone, your iPhone, your Samsung phone, on your tablet, on your laptop. You can use it, the viewer for Kindle, on any platform. And they offer it there on the site for you to download. So, you know, go get the book. You'll have the book. There's lots of links in there that will take you all around. So in one way it's really even better because all of the links to stuff are in there. I noticed that my quotes are tiny for some reason in that, but, you know, you can zoom in and look at a quote if you want because It's a picture, but then you'll also get access to the portal too. Even though you got it for free, you still get access to all the resources.

Awesome, awesome, awesome, awesome, awesome. Okay, so Karen— or Karen, Deborah, I need to make sure that you get the link so we get it out there all over the place. But please, we were talking about it earlier, you know, we're both authors, we publish books, we know that it takes an army, it takes a tribe. To really get our passions, her passions, in really educating people on the inside secrets of angel investing. It takes a tribe to do it. So I would love it if our Shed the Bitch community would support her in going out to this Bitly Thunderclap URL. And like she said, all you need to do is hook in your Facebook and your Twitter and Tumblr there Everything's done for you. She, you know, pre-scheduled, pre-wrote some posts that all you need to do is then share it out through the Thunderclap app out to your community, and then it'll be pre-scheduled. So you'll do it today, but then it won't be sent out until August 5th to help her get, you know, as many people educated and as many people's eyes on this subject as possible because it is a great education and a great strategy for yourself, both professionally and personally.

And I'd like to also add that if you're curious, if you want to know a little bit more about the book, we've been kind of talking about it, you can go to InsideSecretsToAngelInvesting.com, and that's my book thing. There's a little video there about why I did the book, and there's a sample of the chapters. There's a list of some of the benefits, the resources, there's some additional information, and the link is also on that page too if you want to go there. If you're like, well, I want to know more about it before I do that.

And we'll make sure that it's all posted on our Facebook and Twitter pages on Shedding the Bits, so you can also reference that. I also want you to all make note of Karen's social handles, okay? So it's KarenRanz.co. Company, karenrans.co. You can email her, say we didn't get your question answered because we've been like talking a lot about, you know, kind of different things. It's karen@kugarandholdings.com, K-U-G-A-R-A-N-D holdings dot com, karen@kugarandholdings.com. Her Facebook page is Business Investor Grow. You can find her there. You can find her on Facebook as well with the National Angel Investor Network, and I would also check, check that out, educate yourself, see how you may or may not be able to get involved in those things. And then her Twitter handle is Karen_Ranz. That's where you find her on Twitter. Hook in with her. LinkedIn, just look up Karen Ranz, you'll find her on LinkedIn.

You can use that same email address to connect with me on LinkedIn.

Yeah, so just—

I accept. If you have a picture, I accept you.

Yeah, as long as you have a picture.

Yeah, I don't do blue, white, just people.

Yeah, no, no, no, no, no, no, I don't either. I don't either. All right, so we're going to take another brief break, and when we get back, I'm just going to wrap up. Well, we're not going anywhere, but I have another couple key questions I want to understand from Karen, and we'll be right back. Welcome back, everyone. I'm sitting here in studio with Karen Ranz, And Karen is a venture capitalist, she's an angel investor, she's an economist, she's an entrepreneur, and she's sharing with us her inside secrets to angel investing. But you can learn all of them if you pick up her book, Inside Secrets to Angel Investing. And we'll make sure you have all the information out there on our social sites because on August 5th, for those of you Unlike me, I'm not a Kindle fan, but if you are, then August 5th there's a great opportunity for you to get a free copy. But I also want you to get the— you really, I personally feel you really want the soft copy as well so you can take notes and you can highlight things and you can use it as a true reference tool. Though I'm sure you can do all that on Kindle too, but I'm old-fashioned.

I'm one of those that takes those little strips of sticky notes things and sticks stick them like little arrows.

Yeah, yeah, my books are all massively messed up. All right, so in our last few minutes, share with us kind of what are those first steps, and I'd like us to talk to both the entrepreneur who might be considering this or the corporate professional who has money sitting around, but also to that angel investor who, or one thinking about becoming one and didn't realize this— maybe they're a real estate investor and they're not really considering other options. What would you tell them to be the first couple of steps they could be taking or considering?

The first two things that they would need to do is figure out their capacity to invest, because that will dictate a lot of the types of companies that they can invest in. And so it's— and then sort of how they want to get their return on investment. So if they're— most angel investor deals or angel investment deals that are true equity in a company, you're probably not going to see a return on your investment for 5 years or more. Okay, so it just sort of sits there. So if you are where I am, well, I don't want to wait 5 years to get a return on my investment, then you need to think about other things. Where I have this— there's a— it's not as, um, not known, but there's a thing called royalty financing or revenue cycle financing. And that's where you provide the money and you get like a little tiny piece of equity, but you get paid back on a quarterly, monthly basis, whatever's set up, until some multiple of your money is back. So you don't get as much equity as what you put in, but you get your money back. So I compare that to kind of like when you buy rental properties and you're getting money every month on the rental properties, right?

And then there's holding off on the big return when you would sell.

Yeah, and then, and then I'll— and so depending on— but you're not going to get as big of that return because you've, you've been kind of traded getting equity for getting payments. Okay, right. And then there's where you can be a financer. There's a lot of programs like Prosper.com and these various different thing. So if you're feeling more like, like the flip model where I'm gonna go buy it, I'm gonna rehab it, and I'm gonna flip it and make my money quick, then that's much more of that kind of being where the bank says no, you become the financier. And so sometimes my investors have gotten started with that process. In my story about Jack, I talk about how he did his first investment that way, and then he— you kind of— it's like you get your money, you get a little return on your money, and you build your war chest. To do the other types of investments.

Because I remember she said it takes more than one to really kind of get a really good benefit across all of them.

So you figure out how much and what you want sort of based on your risk capacity, and then you can target the kinds of companies based on what you knew. And in the tool set of the— on the resource, there's a sheet where you go through and you grade your knowledge in different areas, different industries, so you can kind of set up your own measurement so that when you see a deal and it comes your way, and in the book I talk about how you find deals and all that stuff, then you can look at it and it becomes really easy to be able to say, "Oh, it has a 5, so I can look at it." "Oh, this one only is a 4, so I'm not going to look at it." And then over time as you're more comfortable, you're going to get more—

That's actually a great resource to just kind of assess where you're at right now regardless, to really kind of say, "Okay, here I am on my comfort and my knowledge of angel investing." and therefore I need your book, I need to go out and kind of engage, I need a network. That's actually a great source. And again, her book Inside Secrets to Angel Investing is also— it's targeted to angel investors, but trust me when I say, and she knows, that a lot of her entrepreneurs will leverage it so they know what's going on from the world of angel investors and what's in their head. So it's a great book for all of us. And ladies, I just want to, you know, kind of advocate the more you can get, you know, smart and up on kind of what is going on out there in the, what we'll call the investing world, building your wealth, seeking that investment or that infusion of capital that you need for your business or for your, you know, company or for your corporate role. If you are involved in things like that, or if not, if you're not, you can still be one up having that knowledge. So please check it out. Go to her website, KarenRanz.co, or her— remind me real quick— InsideSecretsToAngelInvesting.com. That's easy. It's all about the book, and you can see more details in regards to the book as well. Yeah, these times go really, really fast. It's amazing. So we're gonna have to have you back so we can I know, isn't it amazing? So we can— what we'll do is— is this my copy? Mm-hmm.

Woohoo! I'm going to sign it for her when we're off.

Yay! I get a copy and I am going to read it and I'm going to mark it up and I'm going to go back to her and go, "Ooh, really? I didn't know that." But at the same time, I'm going to look for other topics from this that we can drill into so we can all— because I've talked to my community about the work that I do with Ritz Group in the entertainment sector, and I'm raising money both in my business and for my screenplays and whatnot. So I'm always trying to keep myself up to date, and so I know that you have the same questions that I have. So thank you so much for being part of the program. Oh, shake my hand! Shaking my hand, please!