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Re: investors

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  • David S. Rose
    Jill, I m afraid that Scott is right, and, believe it or not, even optimistic. If ever there is a subject on which I am qualified to opine, it would be this
    Message 1 of 3 , Oct 7, 2007
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      Jill,

      I'm afraid that Scott is right, and, believe it or not, even optimistic. If ever there is a
      subject on which I am qualified to opine, it would be this one, since I am both a letterpress
      printer AND a very active angel investor (who has what is probably the world's only
      combination letterpress shop and angel investment office :-).

      The essential problem is that letterpress printing and angel investing are in completely
      different ballparks. It's rather like going to a butcher and asking him to host your web
      page. Anyone getting involved with letterpress today is doing so for reasons other than
      economic. While there are a [rare] few people who are consistently able to make a living
      doing letterpress (either commercial or fine press), there's no question that any of them
      could make more doing something else.

      In contrast, angel investing is almost *only* about economics, and best practices in
      current angel investing suggest that an investor should look for a return of [you had better
      sit down before reading the next line] thirty TIMES his or her invested capital within five to
      seven years. So, assuming that you are being asked to pay something as low as even
      $25,000 for this letterpress shop, do you really think that in a few years you might
      conceivably be able to return $750,000 in cash to your investors?

      So, with angels off the table, and banks off the table too (because although they don't
      need the high returns of angels, above all they are looking for SAFETY, and a letterpress
      business in 2007 certainly isn't a safe investment), your best bet is likely going to be to try
      to get the seller to give you some kind of financing by taking back a note. This is not a
      highly unusual request, and in this particular case, the seller might find that you are one
      of a very, very few potential buyers.

      Good luck with this endeavor, and let us know what happens!

      -David S. Rose
      Proprietor, Five Roses Press
      Chairman, New York Angels

      --- In PPLetterpress@yahoogroups.com, Scott Rubel <scott@...> wrote:
      >
      > I don't want to be a wet blanket, but this is a tough one when you
      > look at this from a banker's point of view. Small print shops are
      > dying everywhere. Letterpress is a niche that will probably keep
      > going, but nobody will loan you money without a comprehensive
      > business plan. Bankers will tend to look at you like you're an
      > "artist" and you can only overcome this with a strong, realistic
      > business plan. This is a good exercise even if you're not getting a
      > loan, because the exercise will show you the points where you may
      > fail and how to overcome the weak spots.
      >
      > The other thing that may cast you in a good light with a banker is if
      > this shop has a roster of paying customers already so you would know
      > that you can start out being profitable.
      >
      > If these tactics don't work, your other avenue is to assess what you
      > do, or would do, creatively that would attract the heart of what is
      > known as an "angel investor." These are people who have their own
      > money to invest. While they will be as businesslike as a banker, they
      > also tend to have more of their own tastes or heart in their
      > decision. So, if they believe in you personally, or in your vision as
      > an artist, you may be able to convince them.
      >
      > We tried this seven years ago and failed to raise money, but having
      > the meetings was a good lesson in business, and angel investors will
      > meet you in coffee shops instead of conference rooms. We still
      > struggle to this day, probably still could not get a loan, but still
      > we grow.
      >
      > Good luck to you.
      >
      > Scott Rubel
      >
      >
      > On Oct 5, 2007, at 8:45 PM, Jill wrote:
      >
      > > we've had a letterpress business offered to us but lack the funds and
      > > so we're looking for lenders. does anyone have any experience with a
      > > bank or private investor in the Los Angeles area that lends to young,
      > > small businesses? thanks!
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