Send Me an Angel With new angel funds and networks popping up nationwide, that shouldn't be too hard to do.

When it comes to business financing, the past two years have hada Wild West feel to them. There were companies funded by venturecapitalists and taken public in a matter of months, firms whosevaluations soared heavenward at light speed, and BIZ Experiencess intheir twenties cashing in on ventures they founded in their dormrooms.

Then reality hit. Venture capitalists slammed on the brakes, andbanks snapped their purse strings shut. Now hundreds of youngcompanies and would-be BIZ Experiencess are left with start-up andexpansion hunger pangs and no clear idea how to satisfy them.

While firms that are more established can turn to the $5trillion in nonventure private equity available frombrokers/dealers, private bankers and qualified institutionalbuyers, start-ups-especially those not located in thetraditional investment hotbeds-will likely need to fall backon an old standby: the $30 billion angel investor arena.

The good news is, today's angel investors are much easier tofind than their predecessors, because a growing number of them havecreated formal and informal networks. Even more encouraging is thata number of these groups are popping up in nontraditionalregions.

According to Carol Sands, founder of Angels' ForumLLC in Palo Alto, California, these angel funds or networksfall into three basic categories:

1. There are "social clubs," which bring angelstogether to view a high volume of companies and then allowinvestors to execute their own investment deals. This format is alittle less personal, and it places the onus on BIZ Experiencess tomake presentations that stand out.

2. There are those that are organized and run like funds, whereangels put up a certain dollar amount upfront and one individualmanages the process and selects companies to present at regularmeetings. Sands says these groups typically invest as a singleentity but don't do follow-up work with the company; their onlyinterest is the cash-investment relationship.

3. The final format, into which Angels' Forum falls, is afund that utilizes a venture capital structure and process, butinstead of investing other people's money, they invest theirown. These groups invest in companies as a single unit, typicallyrequire a board seat and provide continuous assistance. Forinstance, at Beverly Hills, California-based Idealflow Angel FundLLC, which targets technology companies nationwide, assistancecomes in the form of a "virtual incubator."

These are the basic structures of the new networks, but thereare also hybrids like Arizona Angels Investor Network Inc.According to Greg Cobb, managing director of the Scottsdale,Arizona, network, BIZ Experiencess interested in securing funding fromhis group must find a lead investor, who doesn't have to be amember of the network. That person handles due diligence,negotiates on behalf of interested investors, and is responsiblefor taking care of the LLC formed to invest in the business.

For more information on nontraditional angel financing, checkout "Angel Fundsand Networks".

Angel Funds and Networks

Nontraditional sources of angel financing

Structured Funds:

• Idealflow Angel Fund LLC
  Founded: 2000
  Structure: Fund investing as a single entity
  Investment range: Varies with number of members (each onecontributes $1 million per company and can be given permission toinvest additional amounts)
  Target companies: Early-stage tech firms
  Geographic preferences: Asia and North America

• Sierra Angels
  Founded: 1997
  Structure: Members investing collectively but able to opt inor out of any investment
  Investment range: $250,000 to $2 million
  Target companies: Start-up or seed-stage tech firms
  Geographic preferences: Nevada and Northern California

HYBRIDS:

• Arizona Angels Investor Network Inc.
  Founded: 1999
  Structure: Network of angels who invest individually
  Investment range: $500,000 to $1.5 million
  Target companies: Early-stage firms in any industry
  Geographic preferences: Arizona

• Gathering of Angels
  Founded: 1996
  Structure: Network of angels who invest individually
  Investment range: $300,000 to $1 million
  Target companies: Predominantly seed-stage tech firms
  Geographic preferences: Atlanta; Hilton Head Island, SouthCarolina; Houston; Phoenix; Santa Fe, New Mexico

• NewProduct Development Consortium
  Founded: 1998
  Structure: 130 CEOs of large multinationalcorporations
  Investment range: Starts at $500,000
  Target companies: Entities in all industries at the pre-seedstage (no company formed yet)
  Geographic preferences: Global

• Silicon Pastures
  Founded: 2000
  Structure: Network of angels who invest individually
  Investment range: $300,000 to $850,000
  Target companies: Pre-seed-stage, early-stage and seed-stagecompanies and high-growth firms in all industries
  Geographic preferences: Midwest (particularly Illinois,Minnesota and Wisconsin)

What's Brewing

• The Louisiana Business and Technology Center at Louisiana StateUniversity has created a venture forum that will meet quarterlybeginning in September. BIZ Experiencess can present to interestedangel investors. For details on the process, call the center at(225) 578-4842.

• The Genesis Group in Rapid City, South Dakota, is currentlyraising money for the $5 million Genesis EquityFund and expects to begin making investments in October. Thefund will provide start-up and seed financing ranging from $75,000to $275,000 to firms with the potential to reach annual revenues ofat least $1 million. This privately operated fund also hasconnections to governmental business assistance groups and candirect BIZ Experiencess to these resources for help creatingpresentation materials.

• Charleston Angel Partnership is creating a $5 million fundtargeting high-growth New Economy firms, particularly those in thehealth-care, biotech and telecommunications industries. Companiesshould be just beyond the start-up stage with a management team inplace, have a developed business plan and be looking for $300,000to $500,000. The group meets monthly, and all deals are initiallyscreened by the partnership administrator. For details, contact thegroup at charlestonangelpartners@hotmail.com.