June 2, 2014, 3:59 PM

Think big

(Page 4 of 4)

In 2013, 70,730 entrepreneurial U.S. companies raised $24.8 billion from angel investors, according to Jeffrey Sohl, director of the Center for Venture Research at the University of New Hampshire. The average company taking angel funding raised $350,830 and was valued at $2.8 million. The angel investors on average took 12.5% of the equity in the company in exchange for their cash.

For even smaller companies, the Internet has provided a new option: crowdfunding. Individuals can invest in projects that often have worthy goals, such as protecting the environment or aiding the economically disadvantaged, at sites like Kickstarter.com and Indiegogo.com. For example, the founders of luminAid, a manufacturer and online retailer, say they raised $51,000 on Indiegogo to provide residents of poorer countries 3,300 of the company's lights. The product is charged by the sun and can provide up to 15 hours of light in areas where there is no electricity or when a natural disaster cuts off electrical service.

Kickstarter Inc. reported last month that it had helped raise more than $1 billion for 60,872 projects. Indiegogo Inc. does not report comparable statistics, but a spokesman says the crowdfunding site has grown by 1000% in the past two years.

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