John Dimmer (Tacoma Angel Network)

Today we had yet another guest speaker, John Dimmer, a financial advisor and entrepreneur.  The amount of companies he has been involved with is in the 50-60 range, but a few of the ones he is currently a co-founder/co-owner of include the Tacoma Angel Network, Parker Johnstone Honda Dealerships, Airstream Dealerships in Covington (and more on the way), Roundtable Pizza, and Firs Management.  Dimmer attended the University of Oregon and has a degree in finance.  His early work included working at Puget Sound Bank, and he also worked with our instructor at Freerange media and Lariat Software.  After selling that company, he retired for a short period of time, then went to work for his father at Firs Management maintaining and organizing finance.
The main subject that Dimmer spoke on was financing an up-start.  The financing process begins with "self", as in you must supply financing yourself in the initial phases of your company.  Next, a person should have some connection to a friend or family that can help with funding (either with a loan or a stock option).  The main source of capital for a company should come in the third type, Angel investing.  Angels, for the most part, are currently "65 year old white men."  Most people probably know at least one "angel", but the best method to find angel investors is through an angel network, such as the Tacoma Angel Network, which Dimmer co-founded.  A person will most likely have to present to 10 angel investors in order to succeed with one.  Venture Capitalists and Loans/Bonds are the less likely methods of obtaining capital, but it does happen for probably less than 1% of companies in their lifetime.
Dimmer mentioned a few gems during his lecture.  The first gem was that venture capitalists generally won't be interested in a company with less than a $20 million evaluation.  If a venture capitalist does approach your company or seems interested in your company with a significantly smaller evaluation, chances are that they are only mining you for information to provide one of their portfolio companies with the information they need to destroy you.  This is definitely something to keep in mind if and when I am ever in that phase of a business (although it's not likely that I ever will be).  The other piece of information that he mentioned that I found particularly interesting was the types of investments that angels will commit to.  There are two types, and a hybrid, which include a loan (to be paid back with interest), a stock option, and a hybrid of the two where the angel is guaranteed repayment (or a tax write off in the least) while still having the ability to convert the loan into stock at their discretion.