The anatomy of angels
Tara Tao

Angels are no longer just higher beings of religion or fairy tales (2¥Œ). Behind the success of many renowned enterprises lie the helping hands of angel investors. With the rise of global entrepreneurship, angel investors have attracted wide attention through their support of start-up enterprises.
In China, angel investors are still hard to find. Some private “angels” are testing the water on their own, but there is a lack of angels operating in concert, and so far there has been no scaling of their strengths.
Small and medium-sized enterprises continue to pursue angel investors on the lookout for potential partners. This article aims to provide you with a complete picture of the angel investor landscape, to help you locate your prospective “angel,” who may be lot closer than you think.
Broadway roots
People have always loved telling stories of “angels” and “fairy tales.” Many well-known global enterprises such as Dell, Apple, Google and Sohu have boomed after having been nurtured in their infancy by angel investors. Many extraordinary ideas and concepts have led to stories of great wealth, purely because they materialized under the wings of “angels.”
The concept of angel investors traces back to Broadway in the 19th century New York, where musical and play organizers needed capital to cover pre-performance expenses and were unable to secure loans from the banks due to their loan policies and the high risks involved. The organizers would borrow from wealthy business people, doctors, lawyers, or long-term supporters of the arts. These loans would be settled, with added interest, upon completion of the performance. Many people described these generous investors as “angels.”
Statistics show that there are over 3 million people in China with assets of more than 100 million yuan, with over 900 billion yuan in private funds seeking investment channels in Zhejiang Province alone. Wealthy entrepreneurs in Zhejiang, Jiangsu and Guangdong are all possible angel investors, but we were unable to obtain the actual statistics regarding available angel investor capital.
Sun Wenhai, Executive Director of Eplanet Ventures, described angel investors as wealthy, forward-thinking and bold-three characteristics that distinguish an “angel” from average investors. Most of them have experience in starting up a new company and/or are directors of foreign-owned companies, CEOs of large enterprises, sports stars, doctors, lawyers, or overseas-returned scholars.
According to Lin Fuyuan, a well-known investor from Silicon Valley in the United States and co-founder of Acom Campus, angel investors are not usually professional investors, but are passionate and persistent private investors, who, just like the professionals, choose their target companies based on financial statements and data provided by banks. Lin is a highly experienced angel investor who has invested in 50 enterprises and has successfully exited from 20 of them. His areas of investment include real estate, software and electronics firms, 80 percent of which are located in China.
‘Angels’ work like nannies
In contrast to venture capital (VC), angel investments tend to be smaller and focus primarily on the initial stage of the company. “Venture capital is largely dependent on the positioning of capital, sometimes investing in the initial stages, sometimes in the mid-term and sometimes in later periods,” said Fang Xingdong, President of Chinalabs. Fang believes that most of the capital from angel investments belongs to individuals who are, therefore, only responsible for themselves. VCs, on the other hand, involve far greater responsibility being placed on the fund manager. “The ‘angels’ work like nannies, while VC managers perform more of a coaching role. For VC managers, even though they work directly with company management, success depends on the independent growth of the company.”
Due to the small amount of capital involved, angel investors generally finance companies only in their initial stages. When companies develop to the point of requiring a second round of financing, VCs with larger capital usually step in. In this situation, however, VCs normally demand that angel investors give up their “liquidation preference” (liquidation preference shareholders are entitled to receive their investment back plus any accrued and unpaid dividends). Angel investors are then faced with two choices: one is to make an additional investment; the other is to give up their liquidation preference. Both choices can lead to the loss of their entire investment.
Consequently, dealing with VCs becomes the key to ensuring returns for angel investors. According to Ni Zhengdong, Chairman and CEO of Zero2ipo Group, in an emerging market, a win-win situation is far more preferable, so angel investors prefer to partner with VCs.
As potentially profitable as they are, angel investments frequently end in tears. If VCs have a 20 percent chance of success, then angel investments only have around a 5 percent chance. Angel investors bear great risk as their investments only become profitable if the company achieves a return of 10 to 20 times their investment. In an attempt to minimize risks, angel investors often choose to invest with a partner rather than investing on their own.
IPO—the primary exit method
Even though due diligence and procedures for angel investments are simpler than those of VCs, it still takes many significant steps to complete the process of project selection. The first stage is the search for projects. Similar to the information sources that VCs utilize, angel investors use direct contact with company founders; introductions by “angel teams” and business partners; recommendations by venture capitalists; and background records from lawyers, accountants, consultants and investment banks.
After having identified satisfactory investment projects, angel investors carry out due diligence and project evaluation, including team capabilities, business prospects and profit modeling.
If the angel investor and his counterpart agree on the macro direction, the two parties begin negotiating the clauses of the investment agreement. This is the key to completing the deal, which not only ensures maximum profit for both parties, but also guarantees the rights of investors and protects them from any ethical risks. The two parties must agree on all clauses in the agreement to avoid any future disputes. The major clauses include:

— Securities type arrangement. The following three securities are normally applied to the seed stage: common stock, convertible securities and preferred stock to which many rights can be attached;
— Anti-dilution clauses and protective clauses. Anti-dilution clauses are normally standardized, with the aim of protecting the angel investor in the case of a stock split, stock distribution or capital reorganization;
— Ownership percentage and control;
— Key personnel and incentive clauses;
— Exit mechanism or liquidation agreement.

“Angels” are not philanthropists. In order to seek maximum returns, they generally play a role in operation management of the enterprise in its initial stage.
Angel investors are constantly pursuing the best exit strategy by discussing enterprise development planning with entrepreneurs and finding experienced venture capitalists to partner with through networking. Exiting is the last stage of angel investment operations and exit methods include IPO, acquisition, management buyout and liquidation, of which IPO and acquisition are the most popular. Compared to developed countries, the acquisition system in China is far from mature, and as a result, IPO has become the primary method of exiting for angel investments.
The early stages
Angel investment in China has a long way to go before it reaches a large scale.
“Due to the shortage of angel investment, many venture capitalists are somehow acting as angel investors,” Sun of Eplanet Ventures said. In the first half of 2006, VCs invested in 58 initial-stage enterprises, marking the first time that this number has surpassed that of expansion-stage enterprises.
“Angels” are now found throughout China, with some private meetings being held, taking the shape of small angel investor associations. For example, various meetings are held in Zhejiang aimed at accumulating capital through relatives and friends.
A shortage of regulations
Angel investing in China faces a shortage of rules and regulations due to its infancy. It is not uncommon to find companies using their angel invested funds to buy into the stock market, or for real estate purchases, instead of their intended purpose-the development of the company. In developed countries, there are strict legal procedures and operational regulations for both VCs and angel investors. How can Chinese angel investors avoid investment risks?
Ni of Zero2ipo Group believes that it is not necessary for angel investors to become involved in company management, but they should definitely keep in close contact with the entrepreneurs. “We attend board meetings where we help enterprises to create development strategies, discuss company budgets and seek partners. We meet with the entrepreneurs at least once a month.”
Ni pointed out that the earlier the stage that the enterprise is in, the higher the risk. As an angel investor, Zero2ipo makes its own judgments and project selection based on due diligence.
“You can’t avoid risk 100 percent of the time, so to help minimize the risk we extend our partnerships throughout the initial growth period of the enterprise, and help them with strategic decision-making along the way,” Ni said. “Every company has its advantages, and through cooperation we can help to reduce their risks as well as ours.”
In addition, angel investors should carefully examine business proposals in order to fully understand the specific profit model.
Zhang Xiangning, CEO of Tixa.com-an Internet information and advertising services provider-pointed out that currently, angel investors are facing an environment with no rules or regulations. “The current market might be rapidly expanding, but if we do not create regulations and establish sound systems in a timely manner, today’s boom might turn into dispute-filled chaos in the future.”

(The Daily Mail-Beijing Review Articles Exchange Item)


Prophetic intuition & mystic intuition
Col (R) M. Zaman Malik

Islam is the most misunderstood religion. It has been misunderstood not only by its historical rivals religions, such as Judaism and Christianity, but ironically by its own adherents. Self-seeking Muftis, Qazis and Mystics, at the behest of their Royal Masters, and under the influence of Muslim Feudal classes who misrepresented and misinterpreted Islam as dogmatic, conservative and obscurant creed, while blatantly deviating from the simple, rational democratic and humanistic spirit of pristine Islam. Muslim Rulers stand guilty most of all.
Jacques Martian states: “In the flesh and bones of man there is a soul which is a spirit and which has a greater value than the whole physical universe. Dependent though he may be upon the slightest accident of mother, the human person exists by virtue of the existence of his soul, which dominates time and death. It is the spirit which is the route of personality.” (Education at the cross roads, Oxford University Press 1947, P.8.
There is a clear- cut distinction between prophetic intuition and mystic intuition Prophetic intuition is God-given Message, whereas mythic intuition is either earned by labour and training or is clearly in the constitution or hereditary in the person concerned to have some facility to attain it. Thus Prophets were chosen by God and God would give the prophet hood whom He Willed. Therefore, prophet hood is not a matter of right of any individual, because, for example, he has laboured hard after it or because he has developed certain abilities by sheer training or certain innate capacities in him. So, we can not argue from prophetic intuition to mystic intuition and vice versa. God has His own way to reveal the prophetic messages and we little access to know what are the means to end characteristics of revelation. Hence it is quite consistent and logical for the Muslims to hold God through His final revelation (viz-Al-Quran) has informed us about His decision to stop ending any prophetic revelation to anyone. The advent of prophet’s revelation was always in the whole career of humanity, that the advent of the prophet Muhammad marks the time when humanity did not need any regional or Sectarian guidance and the final guidance needed was for the whole of humanity for the whole future. One reason why the mystic experience is held genuine is that there exists a great desire to know God directly, non-inferentially and immediately. But mystic experience or intuitions in some way go against the utility of prophetic experience. One may say reasonably, if we could have mystic intuition and thereby know God, what is the need for prophetic experience.
Human beings are potentially different from all other living beings. They therefore, had to be brought up differently. All animals were given instincts to motivate, to warn them, to pull them, to deter them. In short in instinct lies all the animality. But man is superior to all other beings in respect of spiritual potentialities. His life, according to Holy Duran and other revealed books is a particle of Divine breath.
This explains why for man the possibilities to progress are unlimited. He, according to the Holy Duran is called upon to assume the colour of God. “Ours is the dye of Allah. And we are his worshippers.” (2:138). In other words the Quran prepares its votaries to develop their intellect, understanding the physique in such a harmonious way that they become perfect model of Islam. The Holy Prophet (S.A.S) urged human beings to inculcate in them the Godly attributes. “Takhallaqoo beakhlaqillahi.” How could they be asked this if they are not capable of doing so? They can, therefore they should. Such men i.e., genuine men, deserve to be called God’s vicegerents on earth. They have to act as guardians of mankind. President George Bush will never subscribe to this idea.
Mystic Intuition We have been pointing out whenever the relevant occasion arose, that mystic institution claimed should not be confused with other types intuitions and neither can it be argued far from the latter ones. By brining out the clarification we had to mention cursorily some characteristics of mystical intuition. Now, it is time to take up the issue at some length. Some religious Philosophers and thinkers have been very serious about mystical experience so much so that they have assumed it to be the real aim of our carminative purpose of religion. It appears to us that even Dr. Iqbal could not rescue himself from the glamorous clutches of mysticism. In the very first chapter on the very first page his famous book he characterizes religion in the following words: “In its attitude towards the ultimate reality it is opposed to the limitations of man; it enlarges his claims and holds out the prospect of nothing less than a direct vision of Reality.”
Again in the last chapter entitled ‘Is Religion possible,’ he divides at the outset religion into three periods viz faith (uncritical acceptance), thought and discovery (-c.f Psychological intuition and the confusion arises thereof), About this third period he writes: ‘In the third metaphysics is displayed by psychology and religious life develops the ambitions to come into direct contact with the ultimate Reality.
Thus Iqbal seems to agree with many others that the final aim of religion is to have religious i.e. mystic experience. Further more he holds that several mystics were able to grasp the reality through mystic experience and also that one cannot fully appreciate the depths of religious consciousness or ultimate reality unless one has such an experience. Thus he quotes the words of Muslim Sufi that ‘no understanding of the Holy Book is possible until it is actually revealed to the believers just as it was revealed to the Prophet’. Dr. Iqbal stresses the need and importance of scientific and experimental study of mystic experience and he specially mentions appreciatively the efforts made in this direction by Ibn-i-Khaldun (1322-1406) in the recent past by Willium James (1842- 1910).

How Britain, US masterminded coup against Mossadegh
Col (R) M. Zaman Malik

US and Britain toppled the government of Muhammad Mossadegh in 1953, which the documentary shown on British television channel Four and in Canada TVs “End of Empire” series, long time back. The blow by blow account of what really happened is based on a series of interviews with M6 and CIA officials as well as British Foreign office personnel and a host of key individuals who were either closely involved in the events leading up to coup or in the planning and execution of the coup itself.
Dr. Mossadegh became Prime minister in April, 1951 at a time when the Iranians were demanding sovereign control over their own country. Although, Iran was never a colony, it was more completely governed by British imperialism. Iranian resentment against foreign domination focused on the country’s greater asset – oil. For the fiercely nationalistic Mossadegh there was no better way to begin the struggle to regain Iran’s lost sovereignty than nationalizing the oil interests of the Anglo-Iranian Oil Company (AIOC, later BP). While the Iranian rejoiced over nationalization and rallied around Mossadegh, the British were incensed. Attlee’s Labour government protested and the British even sabotaged machinery as Iranian officials went to take charge of the installation at Abadan. The Foreign Secretary, Herbert Morrison, determined to resist Iran’s blow to British Imperial interests, condemned the nationalization measure as illegal. The British government promptly dispatched a Naval Destroyer.
Meanwhile, the AIOC’s general manager, Charles Drake, arrived in London to tell a Cabinet meeting attended by the free service chief’s ‘WE should not allow it –Britain’s biggest foreign asset – to just go... If we don’t do anything, within five years we will lose the Suez Canal.’ Accordingly London dispatched paratroopers to the Mediterranean to stand by for, an invasion of Abadan. However, it was at this juncture that the Americans intervened. Pressed by the Americans, Britain reluctantly drew back from armed intervention. President Harry Truman’s administration had a very different perspective. Viewing Mossadegh as a potential ally against Russia, Truman at any rate pressured the British to send in a negotiator to Iran. Mossadegh was resolute in not submitting to any British demands that would have compromised Iranian sovereignty with negotiations deadlocked, and unable to resort to military intervention, the British now turned to subversion.
The British embassy in the centre of Tehran became the hub of conspiracies and subversive operations. British Secret Service men were already placed in position. Their aim was to bolster the opposition in royalist circle and thereby strengthen the Shah against his Prime Minister. Money was channelled to a prominent Iranian business family, the Rashidian brothers, Seyfollah Affadolla, dispensed money for bribes to potential politicians and officials and rent-a-crowd mobs. By this time (October 1951) Britain had new government and Winston Churchill’s Conservatives administration was already more than convinced that Mossadegh had to go. All these people whom we see destroying and killing the Muslims for occupying their resources, are the same lot. What was needed was an opportunity for the British to activate their networks of subversion. And this came in July 1952 when Mossadegh unexpectedly resigned after crossing swords with the Shah over his powers as Prime minister. At British prodding, the Shah appointed the (pro British) Qayam Sultaneh to be Prime minister. But this provoked mass street protests and Mossadegh had to be swiftly reinstated.
This set back drove the British to more devious methods, and the British embassy now began to actively prepare for a coup d’etat, code – named “Operation Boot.” General Zehdi (a man earlier imprisoned by British for pro-German Sympathies) was chosen to lead the coup against Mossadegh, in the Granada Programme, British Charge d’ Affairs, George Middleton described in some details the secret of negotiations he had with Zahedi. Mossadegh, however, appeared to have got wind of what was going on. He denounced the US embassy as a ‘nest of spies ‘, broke off diplomatic relations and expelled British diplomats. The supply of money continued through Rashidan brothers and contact with the family was maintained by radio from Cyprus.
However, because of the forced British exit, the final coup preparations had to be left to the Americans and the CIA. The US had a new administration, and the Eisenhower – Dulles team was all too easily persuaded by the British that Mossadegh had to be chopped. “As Richard cottam (former CIA official) put it in the programme, the British played on anti-communist paranoia in America.” And Washington accepted the argument that Mossadagh’s continuance in office would pave way for a communist takeover. The leaf taken from the West’s Book continues rather with unimaginable ferocity. The old Colonial Powers (US) included, have developed the strongly sticking habit of eating the bone-marrow of Muslims, like then.
In March 1953, the coup plan went into operation. With British agents fanning the flames, a hired mob called for Mossadegh’s blood. Intrigues intensified as the politics of the street took over. Mossadegh’s supporters rallied to his defence, and for the first time, the Iranian Communist party, Tudeh, backed him - a factor which the US CIA manipulated to the hilt in its propaganda. The CIA. Planted articles in the Iranian Press depicting Mossadegh as Communist collaborators. All that progressively much more would come to Iranian Press to malign their Prime minister.
In August 1953, the M16 and CIA were ready to act. The American Ambassador was recalled to avoid complicity. An American agent persuaded the Shah to sign a decree to dismiss the Prime minister of Iran and send a battalion to ensure smooth implementation. The Shah fled the country, but the CIA remained undeflected from its goals and was trying the crowds in its own favour. Agent provocateurs and shock troops posing as Tudeh men spread in the country among the crowds, and with Tehran in turmoil, the CIA persuaded royalists army officers to try again, as Cottam described: ‘ It is in programme “mercery mobs paid for fabulously for programme, will overthrow Mossadegh.”
American dollars were decisive in the overthrow of the Iranian Prime minister. The battle of Mossadagh’s house in which more than a Hundred people were killed, finally Resulted in his surrender. Coup had succeeded (if it were the one), though it was the result of subduing Iranian Army. Zehdi took charge and SHAH returned to the country “In triumph Britain and CIA had pulled off ‘operation Boot” After this the West began to orchestrate the down fall of the popular government. Third world, from not just this only, but countless more Coups by CIA, Mossad and M16, must learn and unite. Asia and Africa has so far presented NO untenable evidence pertaining to Israel-driven America. Hiroshima, Nagasaki, Vietnam, South Asia Korea, East Pakistan and other freedom struggles going on in the Muslim countries, and other Evil States is designed to see Muslim live as destitute, after handing over their precious resources to these ruthless enemies of Fair play and equitable treatment. They have badly crippled the Charter of UNO rather, UNO itself.