Guardian angels: angel investors can be heaven-sent for your startup.

• Author: Stum, Jamie Huish
• Position: EntrepreneurEdge

In summer of 2003, BYU student David Bateman won two business plan competitions, which put $75,000 in his pocket to start his business. His company, Property Solutions, was developing software to automate all of a property management company's transactions, and Bateman soon discovered that software is a spendy endeavor. In October 2003, he realized he couldn't make his payroll and that he needed an angel investor.

Angel investors are wealthy individuals who invest in startup companies in very early stages of development. After an entrepreneur has maxed out savings or investments from family or friends to get a business going, angels will make investments between $50,000 and $2 million, says Brock Blake, CEO of Funding Universe, which connects entrepreneurs with funding sources.

Angel groups have increased by 67 percent nationally since 1999, and about 10,000 investors now belong to angel groups nationwide, according to the Angel Capital Education Foundation. Utah boasts about 80 active angels in groups, from the well-known Utah Angels on the Wasatch Front to the newly formed Dixie Angels in Southern Utah.

Groups allow angels to check out more deals and to take advantage of different members' expertise. Typically, an angel group is made up of about 10 or 15 members, often former entrepreneurs. Most groups require members to be "accredited investors" defined by federal securities laws as a person with an individual net worth exceeding $1 million at the time of investment, or having income exceeding $200,000 a year for the past two years.

For startup entrepreneurs like Bateman, some local resources can help navigate the world of angel funding. American Fork-based Funding Universe connects entrepreneurs with those angels investing in a specific industry through its Website (fundinguniverse.com). "It's like a dating Website for angels and investors, we're doing the matchmaking," says CEO Blake.

Entrepreneurs post business plans online, then receive scores and feedback from FundingUniverse. Those with high scores can be introduced to possible investors or meet with several angel groups at monthly speedpitching events.

"If you send [angels] a business plan and they have no idea who you are, there's not a lot of credibility there. There's a much higher chance of getting funded when it comes through a referral or an introduction," Blake says.

Grow Utah Ventures Website (growutahventures.com) is another forum for entrepreneurs to post a business plan...