I am looking to identify angel investors or smaller venture capital
funds based in California who do deals in the $250,000-500,000 bracket
and, crucially, who have a genuine interest in investing into consumer
goods and brands, specifically health and beauty products. My focus is
hair care, so this has nothing to do with bio-tech or pharmaceuticals.
Please provide details about actual transactions in this area to help
separate those with proven interest from mere theoretical players.
Please list website details and some means of contacting the funds.
Thanks |
Request for Question Clarification by
ragingacademic-ga
on
26 Jan 2004 01:09 PST
englishresearcher, welcome back - and thanks for your excellent
question. I will get to work on this right away, but would like to
ask a few questions if you may -
1) How many such angel investors / small funds would you like me to identify?
2) Why are you focusing on California? Although there is an abundance
of potential investors in CA, such investors will be less likely to
put money into consumer products...angel investors, especially, feel
most comfortable investing in what they know - and most people in CA
made money in biotech or high tech. You may want to consider seeking
out investors elsewhere who had made their money in consumer products,
maybe even in beautycare.
3) Angels and funds also feel most comfortable investing close to
home...this allows them more efficiencies when visiting and keeping
track of their investments. Is there any chance of finding such
investors close to home?
4) Finally, investors feel more comfortable considering a new
investment when it is brought to their attention by someone they know
and trust. This throws a wrench into the whole process, but you may
want to begin by building out a relevant network that will eventually
lead you towards interested and qualified investors. What is your
time frame?
Your thoughts and comments will be greatly appreciated!
ragingacademic
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Clarification of Question by
englishresearcher-ga
on
26 Jan 2004 16:57 PST
Dear RagingAcademic,
In response to your apposite questions/comments I would answer as follows:
1. 10-15 good names/contacts
2 & 3 The focus on California is because the company seeking to raise
the funds is registered in, and operating almost entirely in, the
State, even if ambitions are ultimately national. I agree with your
comment that Angels like the comfort of the familiar, but would say
that this often applies to geography as well as preferred market
segment. Another reason is that the principal - who lives mostly in
England - will come shortly to CA and the nature of the situation is
that she will have limited time for meetings and would like to
concentrate on CA. That said, the key is, indeed, to have a real
interest in consumer products - and if some of the names were
out-of-state players with a consumer interest focus then that would be
great.
4. Your point is very valid and that is the strategy that has been
followed until now, albeit mostly in Europe. However, the angel
network (based in Texas) to which the owner was introduced has
produced few leads and, for various reasons, time is becoming short
now. A 'life or death' decision must be made quite soon - meaning over
the next 4-6 weeks. Consequently the desire to contact some players
directly even if, admittedly, a direct approach may not appeal to many
people.
Hope that provides a clearer picture. Thanks for the intelligent feedback!
Regards,
Mike
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Request for Question Clarification by
ragingacademic-ga
on
26 Jan 2004 17:30 PST
Mike - thanks for your response.
Ok, strategy for this will be two-fold; I've sent out some feelers to
try and find interested parties directly - the challenge will be that
they may not want all of their contact information pasted here, so
we'll have to see how we do that... If you can give me some
additional information about the company/product (obviously, nothing
confidential - but something more definitive than my current guess of
some kind of cosmoceutical hair care product...) that could help in
eliciting interest. If we get any bites then these will be people
once or twice removed from me, so at least you're not running into
this blind, so to speak...
The second strategy will involve a Web search for potential
investors...trying to think of a good way to go about this - to get
high probability targets, I mean; I'll also see what proprietary data
sources I can mine.
If you are aware of 2-3 similar products/companies that have launched
over the past 12-24 months, that could help immensely.
When is the visit, and what's the "drop dead" date for getting this
information back to you?
Interesting project!!
thanks,
ragingacademic
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Clarification of Question by
englishresearcher-ga
on
27 Jan 2004 01:18 PST
The product is one of those you spotted in Long's - Tibet.
As for other products that have launched in the last 1-2 years, that
is difficult to say. The hair care market has constant churn and the
ones that typically get the largest publicity are, not surprisingly,
the brands belonging to the majors. On the sell side, though, Citre
Presse was recently sold to Schwarzkopf. Previously John Frieda was
sold to another major. My fried's previous product, Te Tao, owned by
Kuan Ltd was sold to a British company Network about 18 months back
and is quite present in the USA.
This exercise, as described by you, will more extensive than the
initial question. Obviously it will be tipped appropriately.
Best regards. Mik
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Request for Question Clarification by
ragingacademic-ga
on
27 Jan 2004 08:22 PST
Mike - last questions, promise... :-)
Since product already exists, what is the intended use of these funds?
Is it to set up a distribution network - or something else?
Can you say anything about the extent of current sales volume?
Most importantly, perhaps - will the investors receive a share in the
company, or just in a distribution subsidiary?
Most obliged -
ragingacademic
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Clarification of Question by
englishresearcher-ga
on
27 Jan 2004 11:14 PST
Use of funds: to expand the number of stores in which the product is
sold, i.e. paying the slotting fees (payment to get onto shelves) and
promotion costs.
Sales: Cumulative sales since launch in November 2002 until end-2003 about $150,000
Investor gets major slice of main company equity
I should add that any interested party will receive a business plan,
financial projections and overview of the proposition.
Hope this addresses the issues.
Thanks again.
Mike
I shall be travelling in Europe until FRiday evening and am unlikely
to react to further questions (I don't mind them!) until then,
although I am around for the next 6 hours
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Request for Question Clarification by
ragingacademic-ga
on
29 Jan 2004 22:37 PST
Mike, I am sorry to report that thus far no bites through my network;
I will publish the results of my research within a couple of days.
thanks,
ragingacademic
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Clarification of Question by
englishresearcher-ga
on
30 Jan 2004 17:17 PST
Thanks for trying through the network. Actually, I would have been
surprised if a positive signal had emerged in such a short period of
time. That said, timings on such matters are unpredictable so we can't
dismiss the possibility.
I look forward to the info when you have it.
Thanks. Mike
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Request for Question Clarification by
ragingacademic-ga
on
03 Feb 2004 16:32 PST
Mike - status update - tried a couple more personal contacts, and sent
an update based on the data you had disclosed. Nothing on that end as
yet...
I have one more contact who is, let us say, close to a major major
cosmetics firm. However, I need to appear more credible prior to
approaching him. Some info about your friend the entrepreneur, as
well as perhaps something that ties her to Kuan - maybe a couple of
articles from the British press or the like - will help. He won't
take me seriously if I can't put together a more presentable document,
shall we say...ok? So, please let me know what you can do.
On the "wild goose chase" end - no luck on the angel front - will keep
trying new approaches.
I do have an idea - tell me if you are interested - there are three
major healthfood type chains headquartered in the bay area, all of
them carry cosmoceutical type products, your friend could visit with
them while here. Also, Safeway is headquartered near here, a meeting
with them could be good as well. I'm thinking about distribution
agreements, not investments...
Awaiting your reply and please let me know how you would like to see me proceed.
thanks,
ragingacademic
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