Do you believe in angels? Let the SBA restore your faith.
An estimated 250,000 angel investors pump more than $20 billion into business ventures each year, according to the SBA. Another million or more in the wings seek to invest between $100,000 and several million dollars to help launch or grow other small businesses.
How can you find these haloed magnates? Sign onto the new ACE-Net (Access to Capital Electronic Network). This Internet-based service was developed by the SBA's Office of Advocacy to meet the growing need for a national small-business securities market, says Terry Bibbens, the veteran entrepreneur who piloted the project from its inception three years ago at the White House Conference on Small Business to its operational phase at the end of 1998.
ACE-Net lets you list your company profile on a secure Web site seen by accredited investors only. "Companies seeking up to $1 million in equity capital simply fill out a four-page document, pay a maximum $450 fee and get quick entry to the Internet system," says Bibbens.
ACE-Net is more than just a listing, he adds: Instead of registering your securities offerings in each state, you register only once using the ACE-Net short form, which incorporates exemptions adopted by individual states. "The investor calls the company, negotiates a deal and writes a check," Bibbens explains. "No other action is needed--no legal review or state review."
Bibbens estimated at press time that by January 1999, "40 states will have adopted the streamlined program, and we should have more than 100 businesses and 650 investors participating." He projects those numbers will grow tenfold within a year or two.
The ACE-Net system is managed by a nationwide network of 32 nonprofit operators, often university- or state-based entrepreneurial development centers. Operators generally don't participate in any sales transaction. The ACE-Net Web site (http://acenet.sr.unh.edu) is maintained by the Whittemore School of Business and Economics, University of New Hampshire.
Paul DeCeglie (MrWritePDC@aol.com) is a former staff reporter for Journal of Commerce and American Banker.