In 2009, Steve Woda and his brother Tim dreamed up a new company: an Internet-based service that would help inform parents about how to protect their children in today's high-tech world. The motivation was personal: In early 2009, a child predator had been caught stalking one of Tim's children via social media.
An experienced entrepreneur, Steve planned to seek seed funding in stages while he and his brother worked out the company's early kinks. The happy results so far: Since late 2009, their Arlington, Va., company, uKnow.com, has already attracted about $1 million from a progression of about 20 "angel" investors (individuals and groups who invest in start-up companies).
"Timing was on our side," says Steve, uKnow.com's chief executive officer. "Unfortunately, there's a rising risk for kids online. But fortunately, we found a growing number of angels available to help us address this problem."
While the venture-capital industry continues to consolidate, making it hard for some entrepreneurs to get investment capital, angel investments are on the rise. Angel investors are typically wealthy individuals who, like venture capitalists, make high-risk investments in fledgling companies in hopes of reaping exceptional returns. The difference is that the money they typically provide is much less than what venture capitalists offer, so angels usually have funded very early stages of new businesses. But even that is changing.
An interesting article about angel investors as well a bit of uKnow.com's history.