Angel Investors Return, And They Are Serious

Watch out for the angels: They’re dusting off their calculators and starting to get serious.

Angel investors are wealthy individuals who use their own money to help fund start-up companies at a very early stage — usually after entrepreneurs have already hit up all their friends and family members, but before they move on to venture capitalists. A typical angel investment might be a few hundred thousand dollars, or a 10th of the amount that might be put in later by VCs, who have money from pension funds and the like to work with.

Angels have been around for years, mostly as loose networks of unaffiliated rich folk. In recent years, though, they have started to form angel groups, which are upscale cousins of the investing clubs that were common among 401(k) wage slaves during the 1990s bull market. These groups have names like "Indiana AngelNet" and "Central New York Angels." Most have Web sites, and a few have full-time staffs.

There is even a new trade group, the Angel Capital Association, whose goal is to raise the public’s awareness of angel investing (angels complain that VCs get all the glory), as well as help improve the investing decisions of the several hundred angel groups that are members.

By LEE GOMES
Staff Reporter of The Wall Street Journal.

From The Wall Street Journal Online

Full Story: http://www.startupjournal.com/financing/trends/20050412-gomes.html?sjcontent=mail