Dragon's Den - CBC

nospam@example.com (CHaN) — Fri, 24 Dec 2010 13:10:28 -0800

So I'm back in Victoria for Christmas vacation, and I'm watching the CBC again, and I come across the show "Dragon's Den." I absolutely fall in love with the show. The concept is, you have entrepreneurs going on Dragon's Den, pitching their ideas to five venture capitalists for funding. I'm encouraged by this show because when I took entrepreneurship in business school, the main source of funding they recommended was through government grants and agencies. I hope a show like this helps foster a culture of angel investors and venture capitalists in Canada.

It's pretty valuable to watch people pitch their ideas to a room full of very skeptical investors. On the flip side, if you've got money to invest, it's pretty valuable to develop a healthy sense of skepticism and ask the right questions when presented with an investment opportunity. These investors are even more brutal than Donald Trump, and it's strangely refreshing.

I really like how you get to see both sides of a business deal from the perspective of the business owner and the investor.

For the business owner:

How much control of my company am I willing to give over to investors?
Is the valuation of my company fair?
What expertise do I lack?
What expertise do I want from potential investors and partners?
What's the exit plan for investors?

For the investor:

What's the risk/reward of this investment?
How much money does the business owner have on the line?
Does the owner have good knowledge of the market and competitors?
How long until I get a return on my investment?
How much of my time do they need and what are my roles and responsibilities?
Is the business model realistic or too good to be true?
What are the strengths and weaknesses of this business?

Here's an example of a pitch where the entrepreneurs have a business plan, but clearly didn't do their homework on their idea, and don't understand the market that they're getting into. In this video, the owners are pitching a digital wall calendar.

This other clip is a great business pitch, but the entrepreneurs are too innocent and naive. It's a family business pitching Cosy Soles.The venture capitalists tell them if they weren't on the show, they would destroy them by taking advantage of them. Take away is, beware of investors bearing gifts and understand your financing options.

I'm finding this show very useful because I'm starting to be approached with investment opportunities, and this helps sharpen my business sense. I'm also in a position to pitch investment ideas as well (both personal and work), so learning how to present well is key to success.

Awesome show. There's plenty of clips of this show floating around on YouTube. I heard in the U.S., there's an equivalent show called Shark Tank, where two of the venture capitalists from the Canadian show appears on.

Shopping For Credit Cards - Citi Forward Visa

nospam@example.com (CHaN) — Thu, 30 Sep 2010 23:16:15 -0700

So for the last two Sundays, I've had the privilege of speaking to young adults at church about managing finances. Last week, I focused my talk on credit cards since a lot of people run into troubles with them. I highlighted that if you build up a good credit score, then you can gain access to credit cards which have amazing features. I was ranting and raving about the Visa card that I had, but unfortunately no one in the room could apply for it because it's exclusive to the Royal Bank of Canada. I realize that I was being an unsatisfactory tease for doing that. As a result, I did some research on American credit cards and I'm going to suggest a few cards that I came across. It's a convenient time for me to write this since I'm looking into ditching my awful American secured credit card, so I'm in the market for a new card anyways. A number of folks have been asking for suggestions on credit cards, so here goes.

The first card I'm seriously considering is the Citi Forward Visa.

Overview

Card	Citi Forward Visa
Interest Rate	12.99%-19.99%
Annual Fee	$0.00
Rewards	5 points per $1 spent on dining, books, movies and music; 1 point for other purchases.
Credit Score	Good
Balance Transfer	0% for 12 months

Here's all the disclaimers about all the fees and how much balance transfers will cost.

Points Value

The first thing I always look at is how much the points are worth in real dollars. I went to their rewards site, and found that you can trade in your points for flights, movies, dvds, gift certificates, cash back, etc. To measure real dollars, I looked at the cash back reward. They say 8,000 points gives you $50 cash.

So lets do the math, $50 / 8000 points = $0.00625/point.

If I spend $1 on dining, books, movies, or music, that gives me 5 points. $0.00625 X 5 = 0.03125. That's equivalent to 3.125% cash back. That's not bad at all.

However, for all other expenses, $0.00625 X 1 = 0.00625. That's equivalent to 0.625% cash back which is lower than the average reward.

The biggest expense I have is actually eating out, and movies, so if I spend all my entertainment dollars on this card, then it's worth it. For all my other expenses, I would use my other card because I get the equivalent of 1% cash back on that card.

Assume I spend $400/month dining, and $100/month on movies/books, then that's $500/month X 5 points X 12 months/year X $0.00625/point = $187.50/year cash back.

Bonus Points

The Citi Forward Visa offers a couple of bonus point offers:

6,000 Points after you make $250 in purchases within the first 3 months
2,500 Points when you sign up for Paperless Statements within 3 months of account opening
100 Points each billing period when you pay on time and stay under your credit line

Lets assume that you can meet all of these criteria, lets do some math.
6,000 points + 2,500 points + 12 months X 100 points = 9700 points X $0.00625/point = $60.62. This means in your first year, you get that much cash for free if you fulfill their bonus points offer.

I really like that this card rewards you for paying your credit card bill on time every month.

Rewarding Fiscal Responsibility

There's two rewards that this card offers which rewards fiscal responsibility, which makes me feel this is a great card for young adults. The first was already covered above, you get 100 points for every month you pay your bill on time, and stay under your credit limit.

For every 3 month period that you pay your bill on time, and stay under your credit limit, Citi will lower your credit card's interest rate by 0.25% (maximum 8 times, or -2% total). If you don't carry a balance on the credit card, then this isn't really a benefit. However, for those who do carry a balance, this could be a nice way to gradually save some money since debt gets a little less expensive.

Card Benefits

Here are some additional benefits with the card:

$0 liability on unauthorized charges (ie fraud)
Cellular Telephone Protection -
If you pay your monthly cell phone bills with your Citi Forward Card and your cell phone is damaged or stolen, you have supplemental insurance coverage that reimburses you for a replacement phone
Extended Warranty -
The terms of the original manufacturers' U.S. warranties (of one year or less) may be extended up to one additional year on most items purchased on your card
Auto Rental Insurance -
You're automatically covered when you reserve and rent a covered vehicle with your Citi card and decline the car rental company's collision loss/damage waiver insurance.
Retail Purchase Protection -
Most items purchased with your card are eligible for protection against accidental damage or theft up to 90 days from the date of purchase
Travel & Emergency Assistance -
You're protected when youre traveling in the U.S. and abroad. Travel & Emergency Assistance services include medical and legal referrals, lost luggage assistance, emergency transportation, translation services and more

Conclusion

I think if your biggest expenses every month is dining, books, movies and music, then this card is right for you since it offers a generous 3.125% cash back (equivalent). I've seen other cards that offer 5% cash back, but it's isolated to a narrow class of expenses, such as only for gas. You know your spending habits, so you'll have to calculate how much money you might make off this card, and if this is the best for you.

I really like how this card also has features that reward good fiscal responsibility, it has no annual fees, and has a whole whack of extra benefits. The benefits I use most would be the cell phone insurance, the extended warranty, and the rental car collision insurance.

(*) Next week I'm going to go over a credit card that caters to investment-minded people.

Disclaimer

Credit cards are a two-edged weapon. It can bring amazing benefits, and it can bring amazing destruction. Credit cards are not for everyone, and I only recommend this card if you're financially responsible. All these benefits the card brings are instantly negated if you're paying 19.99% interest.

This does not constitute financial advice. Please consult a financial advisor for professional advice.

Full disclosure: I do not own shares of Citi or Visa at the time of writing this article.

Chan's Personal Blog - Money