Angel investments tend to range from $250,000 at the lower end to $2 million at the very upper end. Raising angel capital usually takes two to four months.
Angel investors are usually wealthy, experienced business people who make high-risk, potentially high-yield investments in start-up companies or existing small businesses which are looking to expand their market opportunities. They typically focus on companies that have already developed a basic concept and business strategy, are in the seed stage of investment and have the potential for rapid growth. A representative rapid growth company would be one that grows to $50 million or more in revenues during the first 5 to 7 years of operations. In addition to offering significant capital to launch business entities, many angel investors also offer their business expertise and actively participate in the management, operation, and marketing of the business.
The majority of angel investors invest through an angel organization as opposed to operating as a solo angel investor. By joining angel organizations, angels see more deal flow and can share the work of vetting and investing in each deal with like-minded investors. Individual angels usually invest between $25,000 and $100,000 in each company and often invest in 8 to 10 companies at one time. There are currently 16 angel organizations in Wisconsin.
Southeast Wisconsin has three very active angel organizations.
The Wisconsin Angel Network provides access to all Wisconsin Angel Organizations in addition to providing great resources for both entrepreneurs and angel investors.
How to Become a State of WI Qualified New Business Venture
Early-stage businesses conducting pre-commercialization activity related to proprietary technology may be designated by the WI Department of Commerce as Qualified New Business Ventures. This designation is designed to assist businesses in their efforts to attract investors by making state tax credits available to individuals and groups investing in these businesses.
For more information see the Wisconsin Department of Commerce.
National Association of Seed and Venture Funds
The National Association of Seed and Venture Funds is an organization of innovation capital leaders: private, public and non-profit organizations committed to building their local economies by investing in local entrepreneurs.