HOW TO PITCH A MILLIONAIRE: Skip the boardroom of venture capitalists and find yourself an angel investor.

• Author: Ciaramella, Elainna

In 2017, Utah was ranked the second-best state for starting a business. But that doesn't mean it's an easy place to raise capital. Despite a growing number of venture capitalists willing to invest in the state's entrepreneurs, there are still a number of businesses who struggle to make it past the seed stage.

Thankfully, when venture capital falls through, entrepreneurs have another option available to them: millionaires.

THESE MILLIONAIRES MIGHT INVEST IN YOUR BUSINESS

Often wealthy from starting, selling, or going public with former tech companies, these 30- and 40-somethings are ready to hand over their personal dough for companies they care about. Take Jeremy Andrus, for example. After successfully taking Skullcandy from $1 million to $300 million to IPO as their CEO, the entrepreneur was ready to invest his own money to help other companies do the same.

And he's done just that. Mr. Andrus has since built a portfolio of more than 100 private investments, including seed stage tech. "My passion is being an entrepreneur, but my favorite hobby, after my wife and six children, is investing," he says. "You're investing in people. You're investing in an entrepreneur, not just a business."

Of the latest trends in tech, Mr. Andrus is drawn to B2B SaaS businesses. "I think the model creates a lot of value. It creates predictability in business performance. Software businesses are enabling every business, and Utah has a great eco system of B2B SaaS businesses. From an investment quality perspective, it's a great place to invest."

Davis Smith, CEO of Cotopaxi, is also a huge advocate of angel investing. As a young entrepreneur, he depended on angel investors who bet on and believed in him, so for Mr. Smith it's all about paying it forward.

"As an entrepreneur, I've raised around $100 million in venture capital over the years" he says, "A lot has come from VCs and a lot has come from angel investors." He enjoys identifying potential entrepreneurs who have a big dream and then giving them the capital they need to succeed.

As an angel investor, Mr. Smith mentors startup founders and advises them so they make fewer mistakes. "Especially if you're an entrepreneur millionaire or billionaire, you have great insight into what makes a great entrepreneur more than a VC because you've done it before," he says. "You've built teams ... culture. You have a unique perspective in identifying other entrepreneurs, and your returns can be much higher."

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