INVESTMENTS & JOBS IN THE SAN FRANCISCO BAY AREA STARTUP ECONOMY

  

1. Please briefly answer the following background questions:
2. a)     What are angel investors, and angel investors clubs?

An angel investor highly network persons who are very valuable as they invest their own finances into a business start-up for an exchange for an equity share in the company. They are a source of finance to most of the entrepreneurial start-ups. Their aim is not only limited to provision of finances but rather they also aim at bringing in their expertise and skills into the venture. An angel club is a combination of different individual angels who come together to examine and invest in entrepreneurial businesses. Angels club are easier to be traced by an entrepreneur and they act as the fundamental connectors of business dealings in their communities (Preston et al 8-10).

1. b)     What is crowd funding?

This involves the funding of the entrepreneurial start-ups by angels online where a business owner seeks finances from a large number of funders where each contributes a little (Scholz et al pg. 7).

 

1. c)     What is an accredited investor?

According to Securities and Exchange Commission, an accredited investor refers to the investor who has the ability to take economic risks by investing in unregistered securities and are independent thus they don’t need protection by the government fillings. For example, banks, individuals, corporations, insurance companies and partnerships (Palmiter et al pg. 219).

1. d)     What is the Jumpstart Our Business Startups Act (or JOBS) Act of 2012?

This is an act that was signed by president Obama in 5^th April 2012 with an objective of promoting funding of the small business start-ups in United States through the relieving some securities regulations.

1. e)     What are the main provisions of the JOBS Act concerning angel and crowd funding investing?

Jobs Act requires crowd funding deal ought to take place all the way through the SEC registered mediator, within the proposed rules and regulations and incase of crowd funding it must totally occur online under a registered portal with the SEC registrant.

2. Crowd-funding (non-necessarily accredited investor)
3. Prepare a portfolio of 8 investing opportunities in crowd funding you would consider investing in. Explain why, and specify the amount to be invested and returns expectations. (Budget: $20,000)

My choice of the varying investment opportunities is as result of the little amount needed by each and the choice of the items that the businesses deal with. Most of these businesses deal with basic goods that are frequently needed by people.

Investment opportunity	Amount invested	return
Wedding products start-up	$2500	$6500
Furniture business	$3000	$5000
Anti social TV LTD	$3500	$8000
Graphics and printing	$2500	$6000
Clothing and shoes business	@3000	$9000
Bakery start-up	$1500	$5000
Good pub business	@2000	$6000
grocery	@2000	$5000

1. What are the risks/opportunities in crowd funding?

The advantage with this kind of funding is that it creates more job opportunities and employment. However, it has a high risk in fraud and failure from the business.

3. Angel investing (accredited investor)
4. Prepare a portfolio of 4 startups you would like to invest in. Explain why, and specify the amount to be invested and returns expectations. (Budget: $100,000)

These type of start-up usually require labor thus in choosing them despite offering them finances, my knowledge in these businesses can be employed.

Investment opportunity	Amount invested	return
Food and drink start up	$25	$50
Consumer products and services business	$25	$50
Media and entertainment	$25	$50
Internet/web services	$25	$50

1. What are the risks/opportunities in angel investing?

High risk taking especially financial risks but then again this form is personally rewarding with most 50% returns.

 

4. Jobs
5. a)     Look for sources of startups and list 8 startups you would consider working for, and perhaps apply for jobs as well.

Some of the sources of start-ups involve the banks, partnerships, insurance companies, trusts and cooperation.

1. What are the risks/opportunities of working for those particular startups?

The core advantage of sourcing funds from these businesses is that one can get huge amounts of loan or funds but the problem is in their interest rates.

 

 

 

References

Palmiter, Alan R. Securities Regulation: Examples and Explanations. New York, NY: Aspen          Publishers, 2008. Print.

Preston, Susan L. Angel Financing for Entrepreneurs: Early-stage    Funding for      Long-Term Success. San Francisco, Calif: Jossey-Bass, 2013. Internet resource.

Scholz, Nadine. The Relevance of Crowdfunding: The Impact on the Innovation      Process of Small Entrepreneurial Firms. , 2015. Internet resource.