Angels today fill the role of venture capitalists

I’ve just spent time with a group of angels.

I was still on Earth. But as an entrepreneur, it was heavenly to be with a few hundred people devoted to one thing – investing money in new businesses. The largest gathering of private funders of start-up companies came together at the Angel Capital Association Summit in San Francisco, April 3-5, funded by the Kauffman Foundation.

First used to describe investors in Broadway shows, the term "angel" was immortalized in the lyrics of the song, "There’s No Business like Show Business": "Angels come from everywhere with lots of jack, and when you lose it, there’s no attack. Where could you get money that you don’t give back?" Now, the term angel is widely used for backers of businesses.

Angels today fill the role venture capitalists filled 20 years ago. Now, venture capitalists generally will only fund companies that can grow huge, investing a minimum of a few million dollars.

That leaves a big gap in funding for early-stage companies, the type needing $200,000 not $20 million. Angels fill that gap. Until recently, there was no structure assisting these private investors. Entrepreneurs had difficulty finding angels. Angels had difficulty finding good companies.

Rhonda Abrams
Gannett News Service

Full Story: http://www.thedesertsun.com/apps/pbcs.dll/article?AID=/20050410/COLUMNS01/504100314/1084/BUSINESS