Angel Investors

There are now 421 angel investors on FundingUniverse.com and several more are joining every day. When I spoke at the NASVF
conference last week in Philadelphia I told the audience that I think
about 10% of our registered angels are members of organized angel
investor groups, but 90% are independent. I based my estimate on what I
know about the angel investors on the Utah site.

But this week we started asking every new angel investor which
organized angel group(s) they belong to, if any. So my 10% guess will
turn into a pretty good estimate soon.

Last time I checked we were signing up more than 4 angel investors each
day, about 40 entrepreneurs, and getting about 17 new business plans
submitted every day. If you annualize those numbers, you get more than
1,300 new investors, 14,000 entrepreneurs and 6,205 new business plans
per year. But our momentum is actually increasing, so I think we’ll
have substantially better numbers than that in the next twelve months.
I think we’ll get 20,000 to 30,000 new entrepreneurs and more than
10,000 business plans in the next year.

Our company key goal and metric is the national unemployment rate.
Since small businesses account for most job creation in the country,
and angel-backed ventures are often high-growth companies, we think
FundingUniverse.com will help create new jobs all over the country. We
are going to reduce it to 4% over the next five years.

Just kidding!

But wouldn’t it be nice if a web site could help change the economy in
a fundamental way. We really do hope to have a positive impact on local
economies, but that "key goal and metric" stuff is just silly–but hey,
I’m in a great mood this morning. I ran 5 miles this morning and get to
watch BYU beat New Mexico on TV tonight. (Admittedly, I’m an optimist.)

But here is a serious statistic:

One excellent presentation at the Philadelphia conference reported that
about 500,000 new businesses are formed each year in the U.S. About 1
in 10 of these new companies is funded by an angel investor (including
friends and family), but only 1 in 1000 is funded by venture capital.

Here is a link to an article that says 26,000 startups got angel funding in the first half of 2006.

If you are a first-time entrepreneur, you should really meet as many
angel investors as you can, because the chances of getting venture
capital for your first company are very, very, very slim.

One way to find organized angel groups in the United States is on the Angel Wiki, a collaborative site that is sponsored by FundingUniverse.com.

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