| Register/Subscribe Home |
|
|
ONLINE FEATURES
Book Reviews
BW Video
Columnists
Interactive Gallery
Newsletters
Past Covers
Philanthropy
Podcasts
Special Reports
BLOGS
Auto Beat
Bangalore Tigers
Blogspotting
Brand New Day
Byte of the Apple
Economics Unbound
Eye on Asia
Fine On Media
Green Biz
Hot Property
Investing Insights
Management IQ
NEXT: Innovation
NussbaumOnDesign
Tech Beat
Working Parents
TECHNOLOGY
J.D. Power Ratings
Product Reviews
Tech Stats
Wildstrom: Tech Maven
AUTOS
Home Page
Auto Reviews
Classic Cars
Car Care & Safety
Hybrids
INNOVATION
& DESIGN Home Page Architecture Brand Equity Auto Design Game Room SMALLBIZ Smart Answers Success Stories Today's Tip INVESTING Investing: Europe Annual Reports BW 50 S&P Picks & Pans Stock Screeners Free S&P Stock Report SCOREBOARDS Hot Growth 100 Mutual Funds Info Tech 100 S&P 500 B-SCHOOLS Undergrad Programs MBA Blogs MBA Profiles MBA Rankings Who's Hiring Grads | | SEPTEMBER 19, 2000 SMART ANSWERS By Karen E. Klein Looking for an Angel Spread the word among those you trust -- and visit at least one Web site: ACE-Net
Q: I have a spa and mobile-therapy company and need funding to market my products and open a signature location. How can I find an angel investor or partner who will provide capital? --Deborah McElwaine, Beverly Hills, Calif. A: Most small businesses are financed and built through personal savings and loans from family and friends. If you're interested in taking on a partner who will contribute financially to the company, experts say you should look to industry and professional associations, networking groups, and referrals from trusted colleagues and associates. Identify the type of person who would be your ideal partner, then think about where such a person might look for a new business venture -- trade publications, colleagues, or industry conferences. Use those venues to spread the word that you're looking for a partner. As your business becomes successful, finding additional capital to grow the company can become tricky. Your need for cash will quickly outpace personal savings and cash flow, yet your business probably will be too small to attract venture capital. This is where many entrepreneurs turn to private, or "angel" investors, who provide from $250,000 up to -- typically -- no more than $5 million in funding, says John B. Vinturella, a New Orleans-based entrepreneurial consultant and author of The Entrepreneur's Fieldbook (Prentice Hall, 1999). "Often, one or more of the angel investors come from your industry and will expect a seat on your board," Vinturella says. Perhaps the premiere place to locate angel financing is the Angel Capital Electronic Network (ACE-Net). ACE-Net is an Internet-based brokering system sponsored by the U.S. Small Business Administration. Entrepreneurs seeking equity capital can list their needs on ACE-Net and potentially link up with willing private investors. Both the small-business operator and the potential investor register through a regional ACE-Net Network Operator. There are 28 network operators across the country who can give entrepreneurs advice on writing their business plans and on the angel-investor process in general. When an interested investor sees an attractive opportunity, he or she contacts the entrepreneur listed on ACE-Net directly. About 10% of the 60 to 65 firms listed on ACE-Net identify themselves as women-owned, and the site allows investors to narrow their search to women- or minority-owned firms. ACE-Net also cuts through some of the regulatory red tape that used to make it difficult to sell stock to angels across state lines, Vinturella says. Previously, it cost approximately $10,000 for attorneys in several states to review your business plan. Now, 27 states allow companies to offer stock of $1 million or less with a single listing, a $450 fee, and a four-page standard securities disclosure document on ACE-Net.  Have a question about running your business? Ask our small-business experts. Send us anail at smartanswers@businessweek.com, or write to Smart Answers, BW Online, 6th Floor, 2 Penn Plaza, New York, NY 10121. Please include your real name and phone number in case we need more information; only your initials and city will be printed. Because of the volume of mail, we won't be able to respond to all questions personally.  | | |
 Copyright 2000 , by The McGraw-Hill Companies Inc. All rights reserved.Terms of Use | Privacy Policy |
Printer-Friendly Version
