Investing in Alaska.

• Author: Swagel, Will

Angel investors bring the big bucks to start-up or expanding businesses.

In the first part of the 20th century, many came to Alaska to find gold and become rich - but then returned to the Lower 48 to spend their wealth. Those who come to Alaska to work today are much more likely to call the place home, but their investment money also too often goes South.

"The conventional wisdom in Alaska is that if you have money, you invest it somewhere else - not at home," laments Charles Northrip, an economic development specialist in Juneau.

But that isn't always the case.

A number of publicly traded companies are now either headquartered in or do significant business in Alaska-National Bank of Alaska, British Petroleum, First National Bank and Alaska Airlines are a few examples.

Investing in these companies may give a special charge - it's frankly more interesting to shop if you own a piece of the store. Real estate has always held this allure-being able to see and touch your investment.

For those in income brackets that allow them to consider risky investments of $200,000 and up, there is another class of local investment - and the title of "angel investor." Angel investors may provide a start-up or expanding business private capital, and sometimes technical or managerial expertise.

Based on national norms, there are more than 2,500 individuals living in Alaska who fit the federal government's own profile of a potential angel investor-someone with $1 million in net worth or an income exceeding $200,000 annually. In Alaska, many in the legal, medical, dental and emerging technology professions could fit this profile. Nationally, 250,000 angel investors now provide $10 billion in support for 30,000 businesses.

Making Cash Less Scarce

An entrepreneur seeking funding during the crucial early stages of business development can become a pretty desperate individual.

"We usually say the first round of financing comes from family and friends and ex-friends," says Kirk Flanders, who, along with Northrip, works with Alaska InvestNet, a new statewide investor-entrepreneur matchmaking service.

At some point, a business will develop enough to attract bank or other debt financing, but there is a crucial mid-point between putting up the house and shaking hands with the banker,

For appropriate businesses, the Alaska Science and Technology Foundation and Alaska Growth Capital can provide crucial, But for those whose needs don't match up or exceed the requirements of...