One of the toughest questions aspiring physician entrepreneurs ask is "where can I get the money to start my business/support me while I develop my idea/open my new practice?"
This is a biggie - right?

An article in yesterday's USAToday.com, entitled "Attracting 'Angels' to your Business" helps shed a small glimmer of light on one possible solution.

Columnist Rhonda Adams writes:

Pop quiz: If you try to raise money from investors, what's your chance of success?

Well, if you're approaching those individuals known as "angel" investors, the answer is a surprisingly high 12%. That's the result of a study just released by the Center for Venture Research at the University of New Hampshire. During the first half of 2006, one out of every eight businesses that pitched to angel investors received funding.

While you may not think 12% is great odds, compare that with trying to raise money from venture capitalists (who receive hundreds, if not thousands, of proposals for every one they fund) or getting money from your brother-in-law.

The term "angel investor" covers a broad range of funders — all the way from a sophisticated financier who invests hundreds of thousands of dollars in a cutting-edge new technology, to your rich Uncle Bob who invests $25,000 to help you get your mobile dog grooming business off the ground.

What all these angels have in common is that they're investing their own money in entrepreneurial businesses — usually start-ups. Venture capitalists, on the other hand, invest other people's money, typically millions of dollars, and, increasingly, invest in later-stage companies.

Adams ends the article by asking another question:

OK, so here's another question: If you want to raise money from angel investors, what's the best industry to be in?

Here's a hint: Think of all those rich doctors.

You got it: health care. Health care services and equipment received more than one out of every four angel dollars (27%). And don't think that's just for new drugs and cutting-edge health technology. Some of those dollars certainly must have ended up in more mundane small health-related companies, such as physical therapy practices

Software was the next-best-funded industry by angels, getting about 18% of the pie, with retail, media, biotech, and information technology each receiving about 10%.

What does this mean for you? If you're trying to launch an entrepreneurial business — one that has significant growth potential — it's going to be easier to find a deep-pocketed investor to pitch your business plan to for financing.

Just remember, angels invested in only 12% of the new ventures they saw. So even if you have a truly great idea, expect to pitch to at least eight investors before you find your own personal angel.

I grimaced at the visual of "all those rich doctors", as it smacked of a prevailing envious and no longer always realistic attitude towards physicians that has made our lives much less enjoyable in recent years.

Nevertheless, I was heartened to know that, as physician entrepreneurs, we are in a position to ask our colleagues to invest in our business and get a reasonable rate of response.

It does behoove us to make sure that what we have to offer in exchange for that investment, is a well thought-out, sound and viable business plan and a road map for responsible execution!