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profitability to profitability.
Upside The potential and often anticipated amount of money investors
think they can make on a particular deal.
Valuation An investor™s assessment of the viability and financeability of a
venture.
Venture capital The money raised from investors for equity in early-stage,
as-yet-unproven enterprises.
Warrants A “right” owned by an investor; a guarantee bought by investors
when they think a stock will rise; allow investors to buy stock during a
fixed period at a fixed price.
Warranty A guarantee, implied or stated in writing, that what an entrepre-
neur tells an investor about a product or service is true.
Working capital Current assets minus current liabilities equals working
capital”an accounting term; the net assets that are used to continue the
company™s operations.
Workout A company™s rather urgent need for getting itself out of financial
difficulty through an additional round of financing, reorganization, or
possibly both.
About the Authors


Gerald A. Benjamin, M.S., Senior Managing Partner of International Capital
Resources (ICR), is recognized by entrepreneurs, investors, and financial in-
termediaries as one of the nation™s leading authorities on the business angel
capital market. He published the first angel investor magazine in 1992, and
spearheaded the venture conference movement in California, founding the
Northern California Venture Forum in 1989. With his co-author Joel
Margulis, he has published seven books on angel capital, including Finding
Your Wings: How to Locate Private Investors to Fund Your Venture; Angel
Financing: How to Find and Invest in Private Equity; The Angel Investor™s
Handbook: How to Profit from Early-Stage Investing (United States and
India); Raising Finance (United Kingdom); Angel Finance (Japan); and Angel
Finance (China). More than 50,000 entrepreneurs and investors have at-
tended Mr. Benjamin™s seminar “Angel Financing: How to Raise Private
Equity for the Early-Stage Venture,” which has been sponsored by more than
200 prominent entrepreneurial and investor organizations in the United
States. He has developed one of the largest databases of high-net-worth,
early-stage, private equity or business angel investors in North America, with
over 1,359 accredited investors participating. His research on the investment
orientation, preferences, and habits of North American investors has been
recognized in such publications as The Wall Street Journal, Time, Barrons,
Investors Business Daily, Individual Investor, Venture Capital Journal,
Financial Times of London, Medical Economics, San Jose Mercury News,
Investment Advisor Journal, and Inc. Magazine. Before founding ICR, Mr.
Benjamin served as an entrepreneurial finance and private investment bank-
ing advisor to more than 400 companies in the United States, Canada,
Mexico, South America, Europe, and the Middle East. He received his M.S.
and B.A. degrees in business from the University of San Francisco.

Joel Margulis has a B.A. in history and M.A. in English from the University
of Missouri, Columbia. He is the author and co-author of a number of books
covering a range of subjects. He teaches in the English Department at San
Francisco State University and lives in Mill Valley, California.




367
Index

C
128VC Group, 209
Cadle, John, 269, 273, 276, 278
California Capital Access Forum,
A
193, 193
ACENET, 212
California Corporate Code 25102(n),
Affluent Market Consumer Survey,
37, 64
117
California Management Review, 102
Alex Brown, 199
California Statute 25102(f), 193
American Association of Individual
California Venture Forum, 206
Investors (AAII), 193
Camp, Justin, 245, 254, 256, 259
Amit, Raphael, 102, 103
Capital Solutions Network, 212
Angel Investing, 13, 131
Capital Availability Program, 78
Angel Investors Handbook, The, 235
Capital Network, The, 54
Angel Oregon and Venture Oregon, 208
Capmatch, 211
Annual Investment Conference, 208
Carnegie, Andrew, 128
Annual Venture Capital Conference and
Casals, Pablo, 225
Exposition, 190
Center for International Trade
Annual Private Placement Industry
Development, 85
Conference and Private Equity
Center for Venture Research, xxx, 62
Markets Summit, 190
Central Coast Venture Forum, 206
Arizona Venture Capital Conference,
Commercial Finance Online (CFOL),
206
210
Aristotle, xxv
Commissioner of Corporations, 64,
Arthur Anderson Enterprise Group, 87
193
Asset Alternative, 190, 203
Common Angels, 209
Connecticut Venture Group, 193
B
Corporate Finance Sourcebook, 203,
Bacon, Francis, 198
212
Band of Angels, 209
Council for Entrepreneurial (CED),
Berkshire Hathaway, 9
205
Birch, David, xxxv
CS First Boston, 199
Bloomberg Financial Markets, 80
CT Venture Group, 206
Brodsky, Norman, 141
Buffett, Warren, xxiv, 9
D
Bureau of Labor Statistics, xxxv
Dara, Julian, 14
Business Partners, 212
Davidow, Bill, 80
Butler, Samuel, 233




369
370 INDEX


Glosten, Lawrence, 102, 103
DealFlow, 210
Goldman Sachs, 199
Department of Commerce, 85
Great Depression, 7
Department of Commerce and
Great Midwest Venture Capital
Commissions, 89
Conference, 207
Donahue, Jim 3
Growing Your Business, 45
Dow Jones Industrial Average, 7

H
E
Hambrecht and Quist, 199
Early-Stage Investment Forum, 207
Harrison & Mason, 60, 185
Emerging Technology Business
Henry II, 213
Showcase, 206
Hewlett-Packard, xxvi
English Renaissance, 198
Holtz, Herman, 39
Entrepreneurial Dynamics, xxv
Home Depot, 9
Entrepreneur, 90
Houston Angel Network, 208
Environmental Research Foundation,
98
I
Evenson, David, 90
Inc., xxx, 141
Evers, William D., 88, 335
INC 500, 6
“Legal Primer on Securities Law
Industry Conference and Private Equity
Issues for Non-Lawyers,” 335“56
Markets Summit, 190
Excel, 178
INFONVC, 204
Infon VC, 187
F
Institute for International Research, 190
Federal Reserve, 280
Intel, xxviii, 97
Florida Venture Forum, 207
Internal Revenue Service (IRS), xxvi
Flynn, David M., 88
International Business Forum, 190
Food and Drug Administration (FDA),
International Capital Resources (ICR),
26
xvi, xxii, xxxviii, 6, 12, 36, 40, 41,
Forbes, xxi, 7, 71
50, 53, 54, 55, 56, 58, 65, 95, 99,
Ford, xxvi
100, 105, 106, 134, 135, 141, 145,
Fortune, xxi, 50, 97
167, 177, 186, 189, 194, 195 204,
Fortune 200, xxvii
210, 215, 216, 226, 234, 237, 238,
Freer, 99
240, 242, 245, 246, 247
Friedman, Josh, xxx, 13
Investment in Innovation, 207
Investment Opportunity Profile, 44
G
Galante™s Venture Capital and Private
J
Equity Directory, 187, 203
J.P. Morgan Chase, 199
Gales Research, 187
Gaston, Robert J., 12, 99
K
G &W Premium Finance Gazette, 9
Karlgaard, Richard, 71
Gathering of Angels, 209
Kaufman Foundation, xxvii, xxix, 62
General Electric, xxvi
Kennick, Arthur, 98, 117
Giant in the West, 14
Kiester, Lisa, 98
Giving U.S.A., 5
371
Index


L New England Venture Capital
Levy Institute, 98 Association, 225
Localfund, 211 New Jersey Entrepreneurial Network,
Long Island Capital Alliance, 208 208
Los Angeles Times, 13 New York Stock Exchange, xxxiii
Lotus, 178 New York Times, 86
Nierenberg, Gerard I., 273
M Art of Negotiating, The, 273
McDonald University, 82 North Florida Venture Capital Network
Meisner, Steve, 39 (NFVCN), 205
Merrill Lynch, 199
Microsoft, xxvi O
Mid-Atlantic Venture Conference, 205 Off-Road Capital, xxviii
Miller, Arthur, 293 Ohio Venture Association (OVA), 209
Death of a Salesman, 293 Oklahoma Investment Forum (OIF),
Minnesota Investment Network, 211 205
Minnesota Seed Capital Network, 209 Omnibus Budget Reconciliation Act of
Minnesota Technology Inc., 211 1993, 78
Minority Business Development Agency
(MBDA), 85 P
MIT, xxxv Pacific Stock Exchange, xxx
MIT Venture Capital Network, 99, 196 Perkins, Anthony, 230
Money Tree, xxxii Piper Jaffay, 199
Money Tree Report, xxxv, 45 Power Point, 5
Money Tree Survey, 95, 96 Pratt™s Guide to Venture Capital, 187,
Montaigne, de Michel, 141 225
Montgomery Securities, 199 PricewaterhouseCoopers™ Money Tree
Moore, Geoffrey, 86 Report, xxxiv, xxxv, 45, 231
Morgan Stanley, 199 PricewaterhouseCoopers/Thomson
Muller, Eitar, 102, 103 Venture Economics/NVCA Money
Tree Survey, xxxiv, 79, 96
N Private Equity, 212
Nasdaq, xxxv, 231 Private Equity Round Up, 190
National Association of Securities Private Fortunes (Gales Research), 187
Dealers (NASD), 197 Private Investors Forum, 206
National Business Incubator Private Investors Network (PIN), 205
Association, 86, 204 Prudent Man Legal Rules (SEC), xxxiii
National Commission on
Entrepreneurship, xxvii Q
National Small Business United, 87 Quatro Pro, 178
National Trade Data Bank, 85
National Venture Capital Association R
(NVCA), xxxv, 13, 97 Reagan, Ronald, 238
National Venture Capital Association Reed Tail Ale, 59
Directory, 187 Regulation D, 18, 190

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