WomensNet News

November 18th 2010

Womensnet: Angel Investors for Women Owned Businesses

I asked my friend and nationally acclaimed business writer, Marcia Layton Turner, to share some information on angel investors – and the opportunities available to women business owners and entrepreneurs. I was partly drawn to the topic of angel investors because one such investor will be reviewing all the Amber Grant applications this quarter for an opportunity. I hope you’ll find a nugget or two in what Marcia has to share!

Angel Investors for Women Owned Businesses: Is It Right for You?
By Marcia Layton Turner

Rather than taking on debt through loans, you may be able to interest investors in providing funding in exchange for part ownership in your women owned business.

If you’re willing to consider an equity investment in your company to get it up-and-running, versus debt from a bank or other lender, angel investors may be just what you need. Typically providing a first round of funding to help a business start up or expand, angel investors take part ownership of your company in exchange for a cash infusion. Some women entrepreneurs find the prospect of angel investors intriguing.

Although you don’t hear a lot about them, angel investors are everywhere. Angel investors, or angels for short, are individuals or groups of individuals who have money to invest in startup businesses. They provide cash in exchange for part ownership of your company, much like venture capitalists, but on a smaller scale.

Here’s something to consider if you’re a woman looking for funding for your small business. Where venture capitalists may not be interested in startup companies or those needing less than, say, $1 million, angels are mainly interested in getting in on the ground floor. They will typically invest from around $100,000 up to as much as $5 million in a company hoping to be able to take their money out within five years, at a 25-30% return. However, $1 million investments are far more common than $5 million. In addition, companies needing more than $5 million or that do not anticipate providing investors a sizeable return will have more difficulty attracting the attention of angels.

National angel networks

Two of the biggest national angel investor networks include:

Active Capital
Fee: $199
Investment size: $250,000 – $5 million

Excluded ventures:

  • sole proprietorships
  • partnerships
  • limited liability partnerships
  • “blank check” companies (companies intending to invest in future ventures)
  • development stage companies that have no specific business plan or purpose
  • development stage companies whose business plan is to merge or be acquired by an unidentified company
  • investment companies registered or required to register under the Investment Company Act of 1940
  • companies involved in oil, gas, or other mineral or extractive interests
    For more information, contact:
    Office of Technology Transfer and Commercialization (OTTC)
    California State University, San Bernardino
    5500 University Parkway
    San Bernardino, CA 92407
    Investors’ Circle
    Fee: $150 + $995 if your application is approved for participation in a venture fair
    Investment size: $10,000 – $5 million
    Ventures of particular interest:
  • Energy & Environmental Solutions
  • Organics & Natural Products
  • Education & Media
  • Health & Wellness
  • Community & International Development

    For more information, contact:

    Investors’ Circle
    165 11th Street
    San Francisco, CA 94103

    State angel networks

    Some angel investors prefer to limit their investments to companies that operate in their geographic area, so they can be more personally involved. For that reason, be sure and check the state-by-state directory that Gaebler offers. Not all states have angel investor networks, however. In those cases, you may have luck contacting those in a neighboring state.

    You can find a state-by-state directory here:

    Once you’ve located a potential investor group, carefully read the list of excluded ventures to be sure yours does not fall into one of the categories that are not of interest. If you find a match between what the network is interested in investing in and your type of business and funding needs, fill out an application.

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