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Angel Investors are private individuals who use their own funds invest in new business ventures at the seed stage or slightly beyond the seed stage. Because Angel Investors assume very high risks while a new company has a yet unproven business model they will demand a significant equity stake in the new enterprise. It is important for entrepreneur to understand what stage their company is in the enterprise life cycle as the advisability and chances of success of obtaining funding from Angel Investors will be effected by this all important factor.

In most parts of the country many Angel Investors have organized themselves into clubs. These clubs hold regular meetings for the purposes of getting together with entrepreneurs and reviewing business plans with a view toward funding attractive proposals. The Angel Capital Association is a good starting point for locating Angel Capital Clubs in your area. According to the Angel Capital Association in 2006, 34,000 investments were made by Angel Investors in new ventures in North America with the average investment amount being $500,000.00.

Professional networking is another avenue of attack for seeking Angel Investors. Attorneys and Certified Public Accountants who are known to work with high-net worth individuals are the most promising targets. Letting professionals who work with high-net worth individuals know that you have promising new business venture that is seeking seed funding may lead to an introduction that will allow you to present your business plan to someone who is interested in acting as an Angel Investor.

The approaches described above for finding Angel Investors are becoming a bit quaint in view of the strongest new trend in connecting entrepreneurs with Angel Investors: the Internet. The use of the Internet has emerged as a forceful trend in Angel Investing because of its speed and efficiency and because of its ability to filter and narrow-cast investment opportunities on behalf of potential investors. Most Angel Investors are highly-focused on a particular industry segment or sub-segment. By filtering investment proposals along industry segment lines a great deal of time is saved by having the Angel Investor qualify their interest in a business plan before contacting the entrepreneur for further communication. The chances of a positive funding decision are enhanced accordingly.

As testified to by the statistics compiled by the Angel Capital Association, a great deal of Angel Investor financing is occurring every year across the country. Entrepreneurs who are aware of the resources described in this article and who have put together a great business plan will enhance their chances of having their business funded.

Learn more about this author, Cary Dowalt.
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