Angel Investors and Artists: Valuation

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Most entrepreneurs have several ideas floating around. Deciding which idea will create a winning business can be difficult, even for experienced entrepreneurs. Creative entrepreneurs are no different. But, as I talked about in a previous post, piquing the interest of an angel investor will depend on which idea you are cooking up to present for funding. In truth, angel investors can’t predict the future any better than an entrepreneur, but they do use a variety of evaluation techniques to help mitigate the risks of loosing their money, and increase their chances of helping you succeed. In Winning Angels: The 7 Fundamentals of Early Stage Investing, the authors highlight the idea that “valuation is what [the angel investor] is willing to exchange for something else [they] want (145).” As a creative entrepreneur building valuable idea can seem daunting, but in light of this statement, you can see how value is in the eye of the beholder.

Angels who invest in artists may or may not be looking for financial returns. Perhaps they are looking for access to other artists in which to invest or building their reputation as an investor for the arts. Maybe the angel adores your kind of art, and wants to see more of it in their community. But always, always, an angel investor is looking at you and your potential to succeed.

So, if you think you have a good idea that is financially beyond your budget, a great way to convince angel investors that you have potential is to crunch the numbers and show them the value in your idea. If they invest in you, how will they see a return on their investment? Granted, some angel investors most definitely want to see their cold hard cash returned with change, but you may be surprised by someone who wants to simply say they helped an emerging artist. When figuring value for a stakeholder, you should present the cost to start the project, how much it will take in ongoing costs to see the project to completion, and how you expect to profit from the endeavor. Be thorough and specific in each area, and make a point to show the investor what their role will be in the process. If numbers aren’t your thing, seek out someone who can help you see the project through a financial lens.

When you come to an angel investor with a solid plan that includes strong financials, you are setting the stage for an angel investor to see you as a valuable asset to your project or business idea. Some angels decide how to value their investments very quickly and others may take a well-worn path to valuing their investments, choosing to work like venture capitalists, or academics who multiply and discount cash flow. Suffice it to say, if you are looking for an angel investor who uses sophisticated methods, then perhaps you have already graduated beyond emerging artist and have cooked up a delicious idea that goes beyond just completing a project.

I would like to share the story of Johanna Basford, adult coloring book artist extraordinaire. Basford is a Scottish illustrator who studied textile design. Soon after graduating  she began a small business, drawing wallpaper designs. The recession hit, and she folded up shop, realizing her heart was more aligned with illustration than textiles. She began seeking jobs as a freelance illustrator and eventually landed work with corporations such as Nike, Absolut Vodka, and Chipotle. She was approached by a publisher to make a coloring book for children, but asked instead to make one for adults. She drew five pages, and began her journey as a coloring book illustrator. She has sold over 22 million books in over 40 countries! (I have three of them!)

Johanna’s story sheds light on how an artists can grow and offer value to an investor. From humble, free-lance beginnings, to corporate illustrator, to coloring book giant. Just like not all businesses make it to greatness, not all artists do either. Nonetheless, angel investors like to take chances that their investment could pay off in a grand way. So,  build value into your creative ideas, don’t be shy about asking for the support you need, be stalwart in your effort to prove your idea to angel investors.

Angel Investors & Artists: What are you cooking?

 

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So my husband is a bit of a foodie, and he loves to cook. (Did I win the husband jackpot or what?) I asked him, how do you decide what pot to use when you are cooking? His answer: It depends on what you’re cooking.

Yes, given the title of this blog post, I’m about to create a metaphor for artists seeking angel investors using pots and kettles. You, the artist, are an entrepreneur. It is time to start thinking of yourself that way, because calling yourself a delicate teapot is significantly different from being a black kettle. For one, a teapot could never do the heavy work a black kettle does. When an angel investor evaluates you and your idea for funding, he is  going to test your mettle. You need to be tough enough to do your job, and able to withstand a long and heated journey. And secondly, perhaps a delicate teapot does not need an angel investor. Delicate teapots tend to come from money.

Creative entrepreneurs need money. It takes time, resources, and even technology to create a body of work. And before you think I’m finished with my metaphor, I’d like to point out that when an angel is looking to invest in a creative entrepreneur, he will be looking for an idea that has both scope and scale. In other words, angel investments depend on what you’re cooking. The lone artist trying to get funding to paint a mural on a dilapidated  building is not likely going to find an angel investor. There isn’t any return on investment in small ideas. The pot is only half-full. However, a lone artist who has a vision to paint ten murals on a selection of inner city buildings, while teaching neighborhood kids how to paint just might attract an angel for their project. This is a pot full of possibility, able to feed many people. And before you think this stands in the realm of non-profit funding, think about how much exposure is created by that kind of project! A creative entrepreneur can solidify their standing as an artist, build up their personal brand, and sell more artwork in the future. That doesn’t mean your ideas always have to be grand, but they do have to offer a way for the angel investor to profit from their investment.

Angel investors evaluate and consider many other aspects of your business idea. As you have agreed to call yourself an entrepreneur from here on out (or you must stop reading…), you must consider the professional framework angel investors often use for evaluating an investment opportunity. The Harvard Framework takes in to consideration four aspects of an endeavor: the people, the deal, the business opportunity and the context of the endeavor in world at large.

So, when your black kettle is cooking with a great idea, there are a few questions to ask yourself.

Who is on your team? Include yourself in this evaluation, since you must bear the weight of the proposed project. Consider your stakeholders and who will support you in your endeavor.

What are you offering your angel investor? Consider the price and structure of the deal.

What is the opportunity created by cooking this idea? Consider timing, the customer, scope and scalability of the idea, and the business model you will use.

And finally,  is the world ready for your idea? Consider your great idea in the context of the world at large. Think economy, technology, regulations, competition, customer need.

Some angel investors only look for creative projects. They are looking for your kind of black kettle, and if you’re good at combining quality ingredients, then an angel investor might just like what you’re cooking!

This post was inspired by the book Winning Angels: The 7 Fundamentals of Early Stage Investing by David Amis & Howard Stevenson.

 

 

Angel Investors and Sourcing the Creative Entrepreneur

rachael-gorjestani-282049-unsplashPhoto by Rachael Gorjestani on Unsplash

The myth of the starving artist is beginning to dissolve. Artists are often stereotyped as bad with numbers, fickle, full of lofty ideas, and even depressed outliers in their community. In fact, some artists intentionally embody these characteristics for fear of  being stereotyped as a sellout. Honestly, it’s a catch 22 that dampens many creative ventures that have potential to be profitable. However, it wasn’t so very long ago that artists and creative entrepreneurs were funded in their endeavors by patrons and sponsors who believed in their work. Without patrons we would not have the Sistine Chapel,  or the robust history of Shakespeare’s Globe Theater, which was owned by actors who were shareholders in The Lord Chamberlain’s Men.

The idea of a patron brings up pious images of Renaissance artists, but today, there is a new kind of patron that often targets ventures in the creative industries: Angel Investors. Before Michelangelo pops back in to mind, think of  an angel investor as a secular, business-minded person with a keen interest in the value of creativity in the economy. The creative economy encompasses a broad range of activities and businesses, from theater and film to architecture and museums, but one thing that helps define this term is the how this economic sector relies on human creativity to generate wealth.

If you are a lonely artist, struggling with numbers, and feeling depressed that your art has yet to fully support your lifestyle, do not dismay. First, that would further progress the artist’s stereotype. Second, you might be surprised by the financial support of an angel investor if you are willing to step outside your comfort zone and push your work into the “sellout” zone…as in selling all your artwork! Thomas Kinkade was often considered a sellout for monetizing his artwork and galleries. We need not discuss the artist’s contribution to the timeline of art history, but he treated his art as a business endeavor to great financial success.

There’s been million-seller books and million-seller CDs,” Kinkade explained. “But there hasn’t been, until now, million-seller art. We have found a way to bring to millions of people, an art that they can understand.”

The question I have in mind while reading Winning Angels: The 7 Fundamentals of Early Stage Investing, is how can creative entrepreneurs attract angel investors? With the dynamic growth of crafters, artisans, and independent artists, it is important to think big when envisioning the future of our creative work, not only to increase profit for Me, Inc., but in hopes of attracting investors who will see the potential economic impact of the work. Attracting these kinds of investors requires the creative entrepreneur to step outside the artist stereotype, and shed the so-called sell-out stigma of making profitable work.A measure of due diligence is expected from both parties. The investor is looking for a solid business plan, a strong entrepreneur, and the potential of the endeavor to create profit. Therefore, it is imperative that creative entrepreneurs present their idea strongly from various angles. Crunch your numbers. Practice your pitch. Define your vision. Show the investor that you mean business!

Given the various ways angel investors approach sourcing their investment options, it is in the creative entrepreneur’s best interest to build networks with influential people. Angel investors often prefer word of mouth referrals. They play the game of who knows who, so make an effort to meet your area’s who’s who and make friends. There are, in fact, angel investors who specialize in certain kinds of investments; one specialty is the creative industries, which encompass all manner of arts-lead endeavors, including non-profit. A quick internet search can reveal matchmakers for entrepreneurs and investors in your area.

And finally, don’t be shy about spreading your gospel! Ask for interviews and introductions. Speak with a lawyer, banker, or copywriter who can review your presentation materials. E-mail the guest speaker, the book author, or the blogger that speaks your language. Don’t be afraid to tell them where you want to go with your work. If you are a good fit for their skills and interests, angel investors are ready and willing to offer their financial support, but they cannot do so if they have never heard of you! Being authentic in your networking endeavors will ensure what they hear is all positive!

 

 

 

Greatest Marketing Campaigns: Outdoor Ads No. 1-5

Outdoor Ads are located at The Obie Awards Website

Makers Mark Outdoor ad

 

Greatest Marketing Campaigns: Magazines No. 1-5

The images for this assignment were retrieved from 33 Powerful And Creative Print Ads That’ll Make You Look Twice

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MA:Discover the Full Story

Advertising Agency: Saatchi & Saatchi Russia, Moscow, Russia

This breathtaking ad showcases the monumental size of Russian architecture, playing with the “tip of the ice burg” analogy. The Shchusev State Museum of Architecture wants visitors to know that if they were to really take time to mine the depths of Russian architecture, they may be overwhelmed by the vastness of the country’s structures. The museum used the advertisement to showcase their exhibition and educate audiences about Russian Architecture. The target for this ad would be very broad, bringing in local, regional, and international visitors, all of whom have yet to “discover the full story” about the architecture of Russia. The ad wants the viewer to attend their exhibition to learn about Russian Architecture, and perhaps go out into the city of Moscow to use their newfound information to admire the city’s architectural gems. The value proposition is in cultivating knowledge and cultural pride in the city’s architecture both near and afar. The ad does an outstanding job of drawing a viewer in with awe and curiosity.

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Moms Demand Action: One Child Is Holding Something That’s Banned in America to Protect Them

Advertising Agency: Grey, Toronto, Canada

Obviously, the subject of violence in schools is a very sensitive subject. There was a time when the sensitive subjects in schools involved books rather than guns. Moms Demand Action is an organization working to change gun laws for the safety of school age children. This shocking advertisement is both smart and ironic, playing off the well-known childhood story of Little Red Riding Hood, which was banned in public schools for the bottle of wine in her basket. The ad questions why the obvious danger, an assault rifle, is not also banned. The objective of the campaign is to educate viewers about other ways we have protected our children in the past, and bringing to light the need for change in American gun laws. The effectiveness of these ads will be seen during voting time frames across the country. The target market is most certainly parents and grandparents, as well as teachers and other professions that work with school age children. The ad wants the viewer to visit momsdemandaction.org to support their movement to ban weapons in schools. The value proposition is the safety and security of our most valued possession, the lives and future of our children.

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Oogmerk: Get the Respect You Deserve

Advertising Agency: LG&F, Brussels, Belgium

Oogmerk is a Belgian eye glass company and their humorous ad campaign, Get the Respect You Deserve, plays on the concept that glasses help you see, but a good pair of glasses also frame how others see you. A man in a red-stained white t-shirt might be perceived as a butcher, but with the addition of glasses, he becomes an artist. The objective of the ad is for Oogmerk to sell more glasses, and the target market is a full range of people who need and wear glasses, perhaps even a few who don’t actually need glasses but want a certain look. The ad wants viewers to discover Oogmerk Optician’s brand and purchase eye care and glasses from them. The viewer benefits from using the product because he or she can now see better and also feel confident about their look. The value proposition that drives the customer to purchase their glasses at Oogmerk is a combination of fashion and necessity.

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Durex: Extra Large

Advertising Agency: The Jupiter Drawing Room, South Africa

This advertisement makes me chuckle, because like many people, I enjoy a good clean, slightly off-color joke. This bold, funny ad is for Durex Condoms, specifically the extra large ones. It shows a fallen hurdle, that presumably has been knocked over by a runner with an “extra large” penis. The objective of the campaign is to inform their target audience (men with extra large penises, specifically athletes) that Durex makes a condom that will accommodate their size. The ad wants the viewer to purchase Durex condoms, and if the action is taken, the man with the large penis will adequately protect himself and his partner during sex. The value proposition is in catering to a specific portion of condom users, by creating a condom that fits their size, making safe sex more likely and more comfortable.

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Kielo Travel: Dreaming of a Holiday?

Advertising Agency: New Moment New Ideas Company Y&R, Belgrade, Serbia

This advertisement for Kielo Travel taps into the imagination by making the rings on a binder look like a ladder for entering a pool. The ad appeals to viewers who have been dreaming of a vacation while working hard and perhaps need help deciding where to travel. I, for one, get a little wistful looking at this ad! The objective of the campaign is to increase sales for Kielo Travel. It is time specific to summer vacation or even a winter retreat to a warmer locale. The target market appears to be white collar workers who may have vacation pay in their jobs. The ad wants the viewer to engage Kielo Travel for their holiday plans. The viewer benefits from taking this action by getting package pricing, and travel details taken care of by the travel company. The value proposition lies in not having to work in order to plan a holiday. By hiring a Kielo Travel, the planning and logistics are done by the service so that the viewer can simply go enjoy themselves in the pool.

Greatest Marketing Campaigns: Newsprint No. 1-5

 

The following press ads were retrieved from

The World’s 17 Best Print Campaigns of 2013-14

The following ads are Grand Prix and Gold Lion winners from Cannes

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Client: Penguin Group China
Agency: Y&R, Beijing
Gold Lion Campaign
Penguins holding microphone booms crash scenes from literature in these ads for new Penguin audiobook versions of the classics.

The objective of this print campaign was to inform customers about a new collection of classic audiobooks. Penguin Books are well know for their strong cover illustrations. The addition of the client’s mascot, the penguin, along for the journey is playful and humorous. With audio books becoming more popular with increased mobility, the target audience is book lovers who adore the classics, but are often on the go. The ad hopes to induce these mobile listeners to purchase Penguin Classic stories and listen during their travel time. The value in adding the classics to audio selections means that listeners will feel like they have participated in a classical reading tradition without having to spend time physically reading the book. This allows listeners to multi-task, whether during a commute or just cooking dinner around the house. Penguin Books has long been known for their orange binding, a branding which signifies quality reading. Now their consumers have another way to read, and they can trust both the story and the audio will be of good quality.

 

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Client: Unilever / Omo
Agency: Lowe Vietnam, Ho Chi Minh City
Gold Lion Campaign
Virtual fun just doesn’t stack up to getting down and dirty in the real world, according to these ads for laundry detergent, themed “Dirt is good.”

The objective of this ad is to persuade parents to encourage outdoor play, letting children get dirty, and therefore create the need for laundering dirty clothes. However, this ad has a little heart, too. Sure every kid these days has an iPad, but the learning, doing, imagining, and growing that is most important to childhood might just be outside of the screen. This ad does a wonderful job of comparing these two ways of child’s play. The target market for this ad is mothers who struggle with the choice between screen time and outdoor play. Obviously, Unilever/Omo would very much prefer mothers promote outdoor playing since it means kids get dirty and will need to have their clothes laundered, hopefully by a mom who has been swayed by their ad to use Unilever/Omo detergent. The value proposition to the customer is they will feel good about having their children get dirty outside (“Dirt is good.”) They are also prepared to wash clothes with a brand and product that supports their parenting choices.

 

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Client: McDonald’s Austria
Agency: DDB Tribal, Wien, Austria
Gold Lion Campaign
Prickly. Fragile. Explosive. Your mood in the morning can be unpredictable, but McDonald’s is there to help you through it.

This prickly cactus man made me laugh. Although I have never felt this way while hungry for breakfast, I’m pretty sure my toddlers have! The objective of this ad campaign is to offer an easy choice for breakfast to hungry, busy people. McDonald’s is a classic in fast food, and also adept in advertising. The tag-line “Leave your morning mood behind,” is written in a rather “friendly” font, especially compared to the prickly cactus man. I think when we see a McDonald’s ad, we also take in what we believe about their brand from our own history. That said, McDonald’s has to continually recreate it’s brand associations. Here, McDonald’s is promoting the availability of a fast food breakfast in hopes that their target audience (hungry, busy people who get up early) will remember that McDonald’s is more than just burgers. They hope this group of consumers will make breakfast at their chain a habit, and by eating breakfast, the consumer will be able to leave their morning mood behind, feeling satisfied and ready to face the day.

 

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Client: Jeep
Agency: Leo Burnett, Paris
Gold Lion Campaign
Jeep advertised its free-roaming ethos with images of animals which, when flipped, became different animals. “See whatever you want to see,” said the tagline.

I kept coming across this ad in my searches, and it’s simplicity really struck me. It took reading the description for me to see the optical illusion. The objective of the ad campaign is to further solidify Jeep’s reputation as a rugged, adventure vehicle. The dichotomy of visual choices and the tag-line “see whatever you want to see,” plays with the viewer’s imagination twice over. It makes a positive impact on Jeep’s brand, but it also compels the consumer to imagine owning a Jeep that can take them on an adventure. The ad wants viewers to purchase a Jeep vehicle. Although there are a fair share of adventurous women out there, the target audience is mostly men. The value proposition is that Jeep owners seem to live adventurous lives and they have purchase a rugged vehicle with which to explore the world.

 

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Client: PHD Bikes / Harley Davidson
Agency: Y&R, Prague, Czech Republic
2 Gold Lions Campaign
“During the Second World War, Czech riders dismantled their bikes and hid them amongst household objects so they wouldn’t be confiscated and used to continue fueling the Nazi war machine. These ‘parted out’ bikes became symbols of hope that one day freedom would prevail and they could be put back together to reclaim their rightful home—the open road.” These ads used that piece of historical trivia to stylish effect.

I like the story angle of this advertisement, and the tag-line “a piece of freedom” really drives the story home for me. The objective of this ad campaign was to highlight a part of motorcycle history, and educate consumers about this history in Harley-Davidson’s company. Harley drivers (and motorcyclists in general) have a persona of being outsiders, and this story should really resonate with some of the drivers and future Harley-Davidson owners. The campaign hopes by highlighting this story about Czech riders, that Czech consumers will identify with the US Harley-Davidson outsiders and the feeling of freedom while riding a motorcycle, prompting them to purchase a Harley-Davidson motorcycle. The value proposition lies in creating a feeling of freedom for a citizen of a recently liberated country, while also giving them a connection to the outsider persona just by owning and driving a Harley-Davidson motorcycle.