The term "angel investor" seems to be an oxymoron. How can an investor be an angel? Investors are demanding, tough to please and blunt — definitely not angels.

Angel is a term from the early 1900s that referred to people who made risky investments to support Broadway theatrical productions. Over the years the term angel has evolved to refer to wealthy individuals who invest in and support seed stage and start-up companies. Often, the investor is classified as an accredited investor, defined by the SEC as an individual with a net worth of at least $1 million or someone who earns more than $200,000 per year ("Angel Investing," Harvard Business School Publishing).

Some common attributes of angels and angel investing:

• Many angels invest independently, but often band together in loose affiliations for the purpose of collectively conducting due diligence and combining investments.

• The primary focus for angels is the seed (proof of concept) or the start-up stages (complete product development and begin marketing/sales).

• Typical investment amounts can range from a few thousand dollars to millions.

• Following their investment, angels will often become involved in an advisory role with the company, assisting with recruiting, networking, strategy development, operational guidance and additional capital acquisition.

• Typical investment terms include convertible preferred stock as the type of security, a liquidation preference, an automatic right of conversion during an IPO, anti-dilution protection, voting rights, right to elect a director for the board, access to financial and other relevant information, registration rights in an IPO and often a right of first refusal to make additional investments if subsequent rounds are raised.

Many angel groups maintain Web sites where you can access information on how they operate, including information on how to submit applications for investment consideration. As an example, you can visit the Web sites for the Utah Angels (www.utahangels.com) and the Band of Angels (www.bandangels.com).

Most angel groups will require the submission of an executive summary. Each member of the group is asked to review and vote on all submissions by a specified date. All votes are counted, and the companies receiving the most affirmative responses are invited to make a formal presentation at the next group meeting. A meeting may consist of one to five company presentations.

It is always best if you make a personal contact with one of the angels, who might become a sponsor or make a favorable recommendation to the group. Some angel groups require that a member sponsor an applicant before consideration.

During the presentation the company is given a fixed amount of time to make its case, followed by a question-and-answer session. These sessions are intense and frank. Neither party has time to skirt around the issues. The resulting responses by the presenters can make or break the chances of a company receiving angel financing.

Immediately following the presentation, the angels discuss their feelings and intentions. If enough angels are interested in moving forward, one will be given the lead role in working with the company, and arrangements will be made to begin the due diligence process.

Make sure that you approach an angel investor with the same professionalism that you would accord to a venture capitalist, investment banker or other professional investor. The average active angel will see dozens of plans each month, and it is your responsibility to make your company look better than the alternatives.