While angel investing is again on the rise in Utah, more due diligence is being done before angels put up their money. Here are a few of the stronger requirements when applying to the Utah Angels or other angel groups.

. Most investments now are done with some sort of a convertible security, such as a convertible note. An example would be a three-year note, interest at 8 percent, a good conversion ratio and warrants during that time to increase the stake in the company if it is successful. Rarely will angels just make an equity investment (usually common stock) in a company. In addition, your angels may want a guarantee of a certain return - for example, two to five times their money out before any founders are allowed to sell or participate in a harvest.

. Personal guarantees on the money raised are a usual requirement, both of husband and wife, if married, and the personal guarantee of co-signers if the entrepreneur doesn't have substantial assets of his own. Many times the angel hears the comment that the borrower doesn't want his wife/parents/co-signers to have to personally guarantee the loan. The standard answer the angel gives is, "Why should we bet on you if the people who trust you the most won't?" The angels may require personal guarantees of all members of the management team who own more than 10 percent of the company.

. No sales, no funding. Call it "proof of concept," test market or whatever you want. No matter how good the story, forecasts or optimism, the angel wants to see that someone values the product or service enough to actually buy it. Trying to find seed funding for a startup with no revenues is virtually impossible without some sales that have come from bootstrapping or some other means.

. The management team has to have as its leader someone who has had a successful business experience, especially in managing a company and ensuring that accounting is being done correctly.

Angels put emphasis on the team before the idea, product or service. And they want the team committed with their own funds before any angel funding goes in. That means the team's own money needs to be invested, whether it comes from credit cards and savings or is borrowed from relatives. If anyone on the management team has a bankruptcy in his or her past, the angels usually won't bite. Too many times the team leader and team members have lots of stories but no successful harvests of a company or no major assets of their own.

. Have a financing plan to present. Many entrepreneurs expect the angels to tell them what financial terms they want once the valuation of the company has been done. But that is not the way things generally work. If the company has a CFO or a financial adviser, then a determination of the kind and amounts of security needed (convertible bond, convertible preferred, warrants, etc.) should be presented. The angels may want to change the terms, but they also want to see that the company is sophisticated enough to at least come up with an initial proposal. Remember, however, that the guys with the gold make the rules, and in the end, cash is king. It is better to get some funds to make the pie bigger for everyone than to hold onto a large piece of a very small pie.