By Frank Szivos, Angel Investor News Editor

Who: Richard Sherwin

Where: Connecticut

Experience:  Started in the corporate world, rising to a CEO of a telecommunications company. Left in 1999 to begin investing in private equities. Saw the opportunity to invest in private companies and get a good rate of return on his investments. Involved in start-ups throughout his career and knows how hard it is for them to get funding.

How: Pulled out of the stock market and invested his funds in private companies, which he considers a smart move as it dipped into a recession. First invested in another telecommunications company, raising $1 million in 2000. Also backed his brother-in-law, a chef, in an upscale restaurant. Now opening a boutique next door to the restaurant. Found that running restaurants was no different than running a telecommunications company. Invests as much in the management team as the founding concept of a company.

How Many: Has invested in nine private companies. Looks to invest between $25,000 and $150,000. The average investment has been $75,000.

Tips for Entrepreneurs: Sees a tough environment for entrepreneurs. Points out that he raised his first million from friends. The challenge is to get angels excited about the business concept, which is challenging since they might look at hundreds of possible deals. Finding one investor can lead to networking with others. Angels typically fund a portion of seed money and often look to draw other angels into the deal.

Tips for Investors: Spread your investments around among different concepts. Invest for dividend returns and capital appreciation. Dividend returns create cash flow while capital investments take time to pay off. Know the management team when considering an investment. Even if you like the concept, it all rests on the management team.

Contact: rsherwin@rigotelecom.com