Highway To Heaven

You don't need to look on high--and low--for angel investors. Try these proven paths.

Through the sheer ingenuity of their Internet-based promotional and sweepstakes management service, RealTime Media Inc. co-founder Chuck Seidman and his partners, Bruce S. Allen, Bob Auxier, Peter Jensen and Charles Ruderman, have persuaded some of America's most admired companies to hire them.

The Haverford, Pennsylvania, firm has a lock on the technology for creating scratch-and-win promotions on the Internet (patent pending). Rather than scraping faux gold leaf off of a paper ticket, Internet surfers scratch away with their mice to reveal whether they've won prizes.

As it turns out, the lure of winning $1 million instantly--or, as with the current Beat the Street promotion, $20 million for correctly guessing the close of the Dow Jones and NYSE average on a particular day--is an extremely effective technique for directing Internet surfers to a particular site. "It's all about driving traffic," says Seidman, 47. "Being on the Internet means nothing unless you can get traffic to your site and convert [surfers] into members or give them incentive to take a desired action." Apparently the heavyweights agree, because the likes of Microsoft, Lycos, Ford, Yahoo!, the NFL and CDnow have hired RealTime to create custom instant-win promotions to drive traffic to their Web sites.

All this has been accomplished with the kind of entrepreneurial panache successful companies are made of. Still, Seidman understands that Internet promotion is big business--and his competition is well-funded. "To compete and take this company where we know it can go, we need more capital," he says.

Seidman figures his company needs $3 million, which has him beating the bushes for angel investors. Unlike the promotions he's creating, bringing angels to the table is no game.

For companies like RealTime, raising money from angels, or any kind of investor for that matter, generally is done in four steps: identifying prospects, preparing to contact them, contacting them and closing them. But as with falling dominoes, everything depends on that first critical action. And in this case, entrepreneurs can't possibly hope to finalize deals with angel investors until they succeed in locating prospects.

So where do angels hover? There are a number of predictable haunts, ranging from Internet and chamber of commerce cliques to universities, business incubators and your professional advisors. Here's a rundown on how to get started. (And remember, none of this will be easy, so be prepared to dig hard.)

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This article was originally published in the June 1999 print edition of Entrepreneur with the headline: Highway To Heaven.

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