You may have seen the announcement that the valley’s second angel fund, the Treasure Valley Angel Fund, is now open for business. Full disclosure: I am an investor in the fund and my firm, Loon Creek Capital, helped guide the fund through the organizational effort.

The new fund presents a case study in the process of raising seed capital in Idaho. It took about 24 months from early discussions until the capital was raised. Active fund raising began in January of this year and reached the minimum in July. I wrote about it in February (“New fund will benefit valley investors, entrepreneurs,” Business Insider, Feb. 29-March 6).

Why does it take so long to raise capital? There are several reasons:

Investors are conservative. There are always more reasons not to invest than there are to invest.

Investors are busy. It’s hard to get the attention of busy people. In most cases someone has to sit down personally with an investor to review the business plan, explain the risks and the potential benefits. It takes time to get these appointments.

There is usually a “minimum raise.” Most security offerings have a minimum amount to be raised before capital can be released to the company. In the case of the angel fund, that minimum was $750,000. While a minimum raise protects the investors, it usually means it will take longer to conclude the offering and begin to put the capital to work.

The implication for entrepreneurs is it takes a long time to raise capital. You must plan for this and be sure you are beginning to raise capital well in advance of the time you actually need it.

Now that the fund has reached its minimum raise, it is accepting applications from entrepreneurs for funding. Applications will be managed by the parent organization, the Boise Angel Alliance, and can be submitted at www.boiseangelfund.com.

In the first fund, about 5 percent of the applicants actually received funding. I don’t expect the second fund to be any less restrictive. So entrepreneurs should make sure they have done their homework before applying.

The website contains information on the kinds of deals in which the fund will invest, the typical terms and the processes used to make the investment decision. I strongly advise entrepreneurs to read through this information before submitting an application. And they are welcome to contact me for an informal discussion if they believe that would be helpful.

The fund is authorized to raise a total of $2 million and will continue to seek qualified investors as it begins considering investments in local entrepreneurs.

To be qualified, an investor must be a residents of Idaho, must qualify as an accredited investor (generally a net worth of more than $1 million not including the equity in his or her primary residence), and must represent that the investment does not exceed 10 percent of the investor’s net worth, exclusive of the investor’s home, automobiles and furnishings. Additional information for potential investors is available at www.treasurevalleyangelfund.com.

KEVIN LEARNED Counselor, Idaho Small Business Development Center; principal in Loon Creek Capital; president Boise Angel Alliance.

kevinlearned@boisestate.edu; 426-3875; kevinlearned.blogspot.com