Broadly defined, angel investors are high net-worth individuals who invest in entrepreneurial companies, usually at an early stage. Like institutional venture capital firms, many angel investors provide cash to young companies and take equity in return. One difference is that angel investors typically invest smaller amounts of money in individual companies than venture capitalists do, making them a possible resource for companies that have exhausted their "friends and family" financing options but are not ready to approach VCs for capital.

Some angel investors are members of angel groups, allowing them to increase their access to investment opportunities and giving them the possibility of investing jointly with other angels to hedge their risk. Tapping into these networks is one way to start looking for investors. Also make use of your personal network -- especially your professional advisors. Your network may well be able to suggest potential angels.

The term "Angel Investor" refers to those individuals who back emerging entrepreneurial ventures.  They are the largest source of real risk capital in the country and the least understood.  In fact, outside the major financial centers, they are often the only source of risk capital for the entrepreneur.  The following guide is a good starting point for entrepreneurs to assess whether angels are the right strategy for funding and support.  Also, we welcome any suggestions for additional links related to Angel Investing. 

According to an Angel Advisor Angel Network Activity Survey, on average, angel groups funded 236% more companies in 2000 than were funded in 1996, a steady annual compounded growth rate of 35%-this in spite of the marked downturn in the broader capital markets. In a typical round, the survey shows, a start-up company receives an average of $350,000, which comprises about one-third of the total round.

The survey also found that, on average, active groups tend to include 85 members who look for a 35% return on their investment. Of the companies screened and formally invited by angel groups to present their business plans, one-third receive funding. The activity survey also notes that on average, angel groups invest between $2 to $5M per year and have invested $9.5M in start-up companies since their inception.

Access to Angel Investors 

Ad-Ventures, LLC
Ad-Ventures describes themselves as a launchpad for dynamic technology ventures like Internet startup iBoost.com or net veteran icom.com, in addition to being active in real estate development and entertainment ventures. Using a network of strategic partners, Ad-Ventures assists Internet and real-estate visionaries to the capital and strategic guidance needed to leap from napkin-penned ideas to global leadership. Ad-Ventures usually doesn't directly provide companies with money to grow their business, but rather works with Softbank. 

AngelSociety
AngelSociety is a leading provider of information, communication, and transactional services for early stage private equity investors, early stage companies, and professional business service providers. Resources provided include Angel Advisor, an AngelSociety magazine from Bloomberg, AngelSociety Online, an Internet community, and AngelSociety Forums & Events, their conference and tradeshow business.

Angel Search
Angel Search at vfinance.com combs government records to gather investment data, industry preferences and total stock positions of America's wealthiest individuals. The site claims "Every individual in our database has a net worth of at least $1 million. AngelSearch™ is constantly updated, cleaned and checked for accuracy. You can search the database as many times as you like, result counts are always free. Once you get a count of wealthy individuals that match your needs, you can buy all matching records, a portion of the records, refine your search or start a new one."

The Angels' Forum
The Angels' Forum is a group of private equity investors with diverse industry, gender, cultural, and business experience. The Angel Investors are united in their interest in investing both time and money in very early stage companies (typical investments would range from $50,000 to $500,000). Angels' Forum invests only in companies headquartered in the Greater San Francisco Bay Area. 

Business Angels Pty. Ltd
Business Angels Pty. Ltd. is a central resource in Australia where both private investors and businesses register. The matching service’s mission is to enable development of Australian technologies and small businesses. (see articles below) 

Business Partners
Business partners is a nationwide Internet based Service that connects Potential Partners, Angel Investors, Investment Bankers and Venture Capital firms.  The Business Partners database allows interested parties to list under a topic of interest for free.  Under each topic are SIC style Categories, Investment Details, Partnership Criteria, Location By State, City, and contact information.  Members have full access to the database of Potential Partners, Angel Investors, and Venture Capital opportunities. 

The Capital Network
TCN is a non-profit, economic development organization developed in response to a growing need to provide entrepreneurial ventures with training and access to investors. The Network offers investor-to-entrepreneur introduction services, educational programs, venture capital conferences, seminars, literature, software, and a network of experts and advisors. 

Capitalyst, LLC
Formerly Amis Ventures, Capitalyst funds startup companies. Capitalyst addresses the private equity financing needs of entrepreneurs by providing an efficient early stage funding process. In addition, Capitalyst enables qualified investors to locate, assess and co-invest in prescreened high potential startup opportunities with the Capitalyst affiliated StartUpFund One. Focused on the Northeast and Mid-Atlantic regions, Capitalyst is headquartered in Boston, Massachusetts, with a regional office in Washington, DC. 

Connect Atlanta at Growco.com
Connect Atlanta provides a list that identifies local angel investor programs and seed capital investors.

Donmar Business Services
Donmarbiz’ Angel Access facilitates communication among private investors and pre-screened, qualified entrepreneurial companies.  The registry of  Angel investors is based in New Jersey and continues expansion throughout the United States. 

TheElevator
TheElevator’s emphasis is in work germinating in the business schools, engineering programs, and entrepreneurial programs around major universities. Angels who are  registered members of  TheElevator browse hundreds of  "elevator pitches" that have been classified according to: 1)  type of business; 2) geographic location; 3) amount of money desired;  and 4) experience of the entrepreneur. 

Gathering of Angels
The Gathering of Angels began in October, 1996 with the express purpose and mission to provide equity capital to the entrepreneurs of New Mexico. At that time, there were no Venture Capital firms represented in the state and the banks were generally not supportive of entrepreneurial ventures. 29 Companies have received some level of funding, two firms have done up-mergers into a public shell, and thee have received venture capital funding.

International Capital Resources
International Capital Resources reports itself to be the oldest for-profit business introduction service in the U.S., and has developed a database of accredited business angel investors in North America.  ICR offers Business Angel Financing Seminars several times during the year at different locations in the U.S. 

New Vantage Group
New Vantage Group (NVG) manages early stage venture funds for active angel investors including the Dinner Club, LLC, The eMedia Club, LLC, and The Washington Dinner Club, LLC. NVG is also an advisor to WomenAngels.net. Sixty to 80 active angels have invested in each of these Funds, which co-invest with traditional venture capital funds. According to the Group, the Club/Fund concept has proven so successful in the Greater Washington area that NVG is now building a community of clubs nationally. In 2001, NVG is co-launching, with local managers, additional funds as part of the emerging NVG network of active angel venture funds.

The NYNMA Angel Investors Program
The NYNMA Angel Investors Program matches promising start-up companies with experienced Angel investors to facilitate the growth of New York's new media industry. According to the organization, about half of the companies that present at the monthly breakfast receive seed funding of up to $2,000,000. In order to receive funding, one of the company's executives must be a member of the New York New Media Association (NYNMA), companies should have their main office in the New York metropolitan area and companies should be significantly involved in the new media industry.

Source Capital Network 
The Source Capital Network is a members-only Internet site serving active angel investors for fast-growth venture opportunities.  Entrepreneurs present their business plans to angel members using SCN’s videos and audio format. Membership and presentation fees support the SourceCapital Network operation. 

Venture Capital Money (VCmoney.com) 
Venture Capital Money or VCmoney.com is a venture capital financing resource for entrepreneurs, providing sources and information on raising capital including Venture Capital financing and angel financing, and for angels, and investors, providing information on joining or forming an angel group, and investment opportunities. Angel networks may also be interested in combining to form an SBIC.  VCmoney.com also provides a Forum in which entrepreneurs, angels, and investors can share ideas, needs, and other information. 

The Venture Site
The Venture Site uses the global scope of the World Wide Web to help and encourage commerce and industry in the United Kingdom. Specifically, The Venture Site provides Web-based advertising and matchmaking facilities for companies in search of venture capital and private investors. 

Wellspring Angel Fund LLC
The Wellspring Angel Fund LLC is an early stage venture capital group composed of and run solely by angel investors, focusing on nurturing high-growth businesses that are developing innovative products and services in the information and electronic technology areas. 

www.angelinvestors.org
www.angelinvestors.org is a non profit 501.c.6 corporation whose goal is to facilitate informed and profitable investments through an International League of Angels, empower Angels and Entrepreneurs through improved corporate governance, finance and marketing, and strive to harmonize securities laws. 

Venture Planning Associates
According to the firm, many of their projects are funded by angel sources, and often one investor will assist in the funding of multiple projects. The firm offers to teach you what you need to know to get angel investor funds. The firm also offers Private Equity funding reports which provide "all information on the size and type of deal, the investors and all contact information, including phone and email is included, showing $10.8 Billion In Investments in the Second Quarter of 2001."

Wye River Capital
Wye River Capital specializes in providing corporate finance, financial advisory and merchant banking services to companies in the information technology and healthcare sectors. Wye River Capital’s professionals have completed more than 200 equity, debt and related transactions totaling over $15 billion during their collective careers. Based in Annapolis, Maryland, Wye River Capital will invest capital, raise funds through their network and provide other resources to help a company launch or build its business.

Youngentrepreneur.com
Youngentrepreneur.com features a Capital Search Engine billed as the place to look to find the funding your business needs. 

Articles

“How To Be an Angel Investor”  by Howard Stevenson and David Amis. HBS professor Howard Stevenson and David Amis, previous Managing Director of the Venture Capital Report, provide tools and advice to potential angels, and a resource manual for early stage investors.

“The Trouble with Angels”  by Stephanie Gruner 
Ms. Gruner discusses the changes in angels vs. venture capitalists, and warns of the pitfalls of accepting money from an angel without doing your own due diligence. 

“Pennies from Heaven”  by Anne Field 
An overview of the steps an angel needs to take to initiate a network or “band” for the purpose of sharing information on investment opportunities and investing in struggling start-ups. 

“Looking for Angels: making business connections”, by Christine Kaine. CPAs, part-specialists and part-generalists, are ideally placed to act as facilitators in the development of new relationships. The result can be an outcome in which everyone wins, says Christine Kaine.

“Business Angels Come Forth to do Good Works”  by Sue Neales  In another Australian article, Ms. Neales discusses the characteristics of angel investors in the U. S., Britain and Australia. 

“Where Angels do not Fear to Tread”  by Sue Mitchell 
Ms. Mitchell describes the experiences, of Ms. Chris Kaine, a Melbourne woman with little experience in the world of finance or investment, as she set up a "business angels" bureau, matching small businesses in need of equity capital with investors with money to spare. 

“Business Angels Guide -- A Guide to Private Investment in Private Companies”   provided by Business Angels Pty Ltd.   While you have to purchase the manual for the “full Business Angels story,” this web site provides an overview and three additional sections of the manual in extract form.  Some valuable insights, even in the extract form, for fledgling business and angels alike.  Topics provided include “The New Angel,” The Aim of Business Angel Involvement - Harvest,” “Investor Readiness” and “Finding the Right Business Angel and Business.”