Playing an Angel

These are the kinds of steps Tori Stuart took when she looked for angels to fund Zoe Foods, her Newton, Massachusetts, natural foods company. She networked with everyone, getting the buzz out on the street about Zoe Flax & Soy Granola, her natural remedy for the symptoms of menopause. It also helped to have a product that already had enthusiastic customers supporting it. "The challenge in raising money is communicating [about our company and product] because we're in the natural foods sector," says Stuart, 36. "[Not all] investors are natural foods consumers." Getting them to believe in a product they weren't familiar with presented its own set of unique challenges.

But starting to network early--and forging connections long before she even needed capital--is ultimately what helped Stuart and her management team raise $1.2 million even at the height of 2001's economic difficulties. "Start months before you need to," says Stuart. "And to some extent, you have to put the economy out of your mind."

So the bottom line in the angel funding arena these days is simple--it's tougher to get capital, yes, but there is still money to be had out there. "Angels by nature tend to be optimistic," says Simmons, "but they just want more assurances today than they did a few years ago. That's OK--I think [it] helps everybody. But there are still plenty of angels out there looking for deals to invest in. So entrepreneurs who do their homework and prepare--they can get financed."

This article was originally published in the May 2002 print edition of Entrepreneur with the headline: Playing an Angel.