Angel groups fund deals that have a product in the market or going to market very soon--say the next three months. Often times, start ups approach me seeking seed stage funding. They have an idea or the beginnings of a product but they need funding to finish the prototype. I call this seed stage funding because they are still fleshing out the business model and product. Formal angel groups typically don’t invest in seed stage deals. They want deals that are further along with more of the risk taken off the table.
There are several sources of funding for seed stage deals. If the entrepreneur only needs $50K to $100K this is more easily raised from family and friends. Also, individual angels will sometimes invest in seed stage deals if they like the idea, the entrepreneur, or the target market.
There’s a host of accelerators and incubator programs which offer funding as well as training. Here’s a list of over 100 accelerator programs and a similar list for for business incubators. Given the lower cost of starting a business today (it’s about 1/10 what it was 10 years ago), these accelerator/incubator programs can be quite helpful.