Sometimes, it would be nice if we had a Guardian Angel to help us find our way. Angel Funding can help your start-up to find the road to success. Angel Funding is provided by wealthy investors seeking a high return on their investment. In exchange for funding, angel investors usually want convertible debt or ownership equity. Angel Funding often fills the gap between funding given by friends and family and venture capital.

Angel investors are often retired entrepreneurs or executives who, besides wanting a monetary return on their investment, would like to keep abreast of developments in a particular industry. They may invest $25,000 to $250,000 or more in a start-up. They also want to mentor new entrepreneurs, as well as make use of their experience and contacts. Angels tend to invest in the industries in which they themselves have had prior experience. Angel Investors may join together to form an Angel Network to share research and pool investment capital.

To help grow your company, you will want to put your best foot forward to appeal to Angel Investors. There are several things you should take into consideration to increase your likelihood of obtaining Angel Funding:

  • Create a business plan emphasizing your competitive advantage
  • Convert your good idea into a prototype, or working model
  • Recognize that in order to raise capital, you must expend capital
  • Contact angels who are suitable for you
  • Highlight your industry experience
  • Understand that raising capital takes time
  • Recognize that angels are mentors, and are value-added investors
  • Invest in your own venture

How do you find the right Angel Investor for you? The more closely your goals and background match your Angel Investor, the more likely you will be to succeed in getting funding. You may need to reach out and create connections with possible angels.

The Top 10 Angel Investor Groups in the U.S., according to the Angel Capital Association, may be a good place to start. The following list names the group, location, and investment areas. They are ranked by the number of angels in the group:

The Top 10 Angel Investor Groups in the U.S.

Ohio TechAngel Funds, Columbus, Ohio (282 angels): information technology, advanced materials, and medical technology start-ups based in Ohio

Tech Coast Angels, Los Angeles, California (263 angels): tech, biotech, consumer products, Internet, information technology, life sciences, media, software, and environmental markets based in Southern California

Investors’ Circle, San Francisco, California (225 angels): social and environmental issues

Golden Seeds, LLC, New York City (190 angels): consumer products, technology, software, and life science companies founded by or led by women

North Coast Angel Fund, Cleveland, Ohio (180 angels): technology start-ups based in Ohio

Band of Angels, Menlo Park, California (136 angels): early-stage technology companies; the angels in this group are former and current high-tech executives

Hyde Park Angel Network, Chicago, Illinois (133 angels): information technology, business services, industrial technology, financial services, consumer or industrial products, healthcare services primarily in the Midwest

Alliance of Angels, Seattle, Washington (100 angels): Early-stage start-ups in the Northwest Region of the country

Pasadena Angels, Altadena, California (100 angels): up to $750,000 to start-ups in southern California

New York Angels, Inc., New York City (99 angels): invests $250,000 to $750,000 in early-stage technology companies, generally in the Northeast; comprised of entrepreneurs, CEOs, venture capitalists, and business leaders