“Development by Design,” MiBiz, September 18, 2006 What does it take to be an angel investor? By Ron Kitchens Hardly a week goes by that I do not have someone confide in me that they would be interested in investing in some of the 150-plus entrepreneurial companies that we work with each year, but they just are not sure where to get started. With this in mind, we’re launching the Southwest Michigan First Angel Network. To kick off the launch of this new initiative, we have arranged for the Ewing Marion Kauffman Foundation of Kansas City to host a full-day seminar on the ins and outs of angel investing. “Angel Investing – An Overview” will take place at the Radisson Hotel in downtown Kalamazoo on Oct.30. At this point, you might be asking. “What is angel investing?” According to the Internal Revenue Service, a certified investor is someone who has a net worth of $1 million or an annual income of $250,000. According to the Angel Capital Foundation, “Angel investor groups are composed of wealthy individuals who pool resources and investment expertise.” The groups, which are distributed in most U.S. states, are creating a new type of capital for high-growth, earlysttag entrepreneurs who need $100,000 to $1 million in equity financing to grow their firms. A survey of angel groups by the Angel Capital Association revealed that the average angel group invests $1.45 million with the average investment of $266,000 per round and $387,000 per company. Angel groups are certainly on the rise in both Michigan and America, increasing nationally by nearly 60 percent in the past three years, from an estimated 150 in 2002 to 250 last year. Angel investing is more than just another business financing strategy; it is a partnership, a partnership between the company’s original ownership and the angels. It is a partnership that often goes much deeper than just financial, it often involves the angels providing technical and management expertise, financial oversight and in many cases active mentorship. Even before an investment is ever made, a key element in successfully launching an angel network is an active membership. Investing in early stage companies involves a significant amount of effort and expertise to not only identify investment grade opportunities but to conduct due diligence to understand the probability of success. If angel investing still sounds like your life’s calling and you are interested in learning more about the fundamentals, or you are interested in joining the Southwest Michigan First Angel Network, please contact Paul Neeb, Southwest Michigan First’s Vice President for Entrepreneurial Development, Paul Neeb at Pneeb@SouthwestMichigan First.com or call him at 269-553-9588 to talk about attending the Southwest Michigan First/Kauffman Foundation seminar on angel investing. Ron Kitchens is the CEO of Southwest Michigan First, the region’s economic development organization. For a dose of inspiration, enroll to receive an e-mailed daily business quote by going to SouthwestMichiganFirst.com and clicking on the free subscription link. Ron can be reached at rkitchens@southwestmichiganfirst.com. COPYRIGHT 2004. MIBIZ NETWORK. ALL RIGHTS RESERVED. This article appeared in MiBiz, read by upper management executives in West and Southwest Michigan. Print subscriptions are free to qualified individuals who do business in West and Southwest Michigan. For further information about MiBiz Network, visit www.mibiz.com. PLEASE NOTE: Since MiBiz Network retains the copyright for the article, it must be published AS IS, with no revisions unless you receive permission from the publisher.