**SBA**
**U.S. Small Business Administration**
***Championing America's Entrepreneurs***
ACE-*Net*
**The Angel Capital Electronic Network**
**www.sba.gov/advo**
ACE-*Net* is an Internet-based securities-listing service.It is a dynamic, interactive response to the expressed needs ofsmall business entrepreneurs, angel investors, accountants andsecurities attorneys. 
ACE-*Net* provides an unprecedented opportunity for entrepreneursseeking equity financing in the range typically too low to attractmost venture capitalists -- $250,000 to $3 million. It enablesentrepreneurs to reach accredited investors (called "angels")with a net worth exceeding $1 million or annual income greaterthan $200,000. Angels want to invest in a company by purchasingshares of stock and often want to share their vast business expertise.ACE-*Net*allows angels to search for companies from aroundthe country that are listed on the system without giving up theirown privacy. The uniform disclosure document required of all companieson the system makes it easier for accountants of entrepreneursand angel investors alike to submit and retrieve information.Additionally, ACE-*Net* permits companies listing offeringmaterials on the system to take advantage of several federal andstate securities exemptions. These exemptions can significantlyreduce the cost of a security offering without adversely affectingcritical investor protections.
ACE-*Net* transforms what was the informal angel investmentcommunity into a nation-
wide system for entrepreneurs and investors to meet. The programis a public/private
partnership between not-for-profit local network operators (typicallyuniversity- or state-based entrepreneurial development centers)and the U.S. Small Business Administration's Office of Advocacy.
**ACE-*Net* for Entrepreneurs**
If you are an entrepreneur looking for equity dollars, ACE-*Net*can provide you with an expanded opportunity to offer securitiesto private investors. Using the technology of the Internet, thenetwork creates an electronic list of corporate offerings fromsmall firms around the country. This costs less than traditionalprivate placement offerings and saves time due to a streamlinedprocess that has already been approved by federal and many statesecurities regulators.
ACE-*Net* provides the busy entrepreneur with "one-stopshopping" for information,
24 hours a day, 7 days a week, 52 weeks a year. You can learnabout conferences, meetings and programs of interest as well asimportant legislative information, rules, terms and conditionsaffecting the entrepreneurial investment community.
In addition, the ACE-*Net* web site provides disclosure documentsrecognized by 48 states that entrepreneurs can complete with aminimum of expert support. Using ACE-*Net,*
you can sell stock in a growing number of states without preregisteringwith those states. You file and pay fees only after you securethe capital. 
**ACE-*Net* for Angel Investors**
As an angel, you recognize the worth of a good investment; youalso value your privacy. ACE-*Net* uses the highest security-encryptionsoftware permitted to provide you with full anonymity while yousearch for investment opportunities. The entrepreneur will notbe aware of your interest until you contact the company directly.
Not only has ACE-*Net*reduced the paperwork and regulatoryburdens encountered during traditional private placement investments,it also takes advantage of the new efficiencies provided by theInternet. Using ACE-*Net*'s search engine and e-mail systems,you can quickly search for specific types of businesses, markets,investment amounts, geographic locations and other characteristicsof the businesses. In addition, any company that newly joins ACE-*Net*and meets your investment criteria will automatically activatethe sending of an e-mail to you.
Today, about 250,000 angels invest $20 billion annually in approximately30,000 small firms. Estimates suggest that five to 10 times asmany individuals have the wealth, entrepreneurial experience andinterest in becoming angel investors. Until ACE-*Net,* therewas no nationwide, centralized listing service identifying small,dynamic, growing companies for angels to investigate and examine.
**ACE-*Net* for Accountants and Securities Attorneys**
Companies thinking of joining ACE-*Net*need the advice ofsecurities attorneys and accountants to assist them in the preparationof their offerings and business plans. Designed in response toyour recommendations, ACE-*Net*provides educational programsto help new entrepreneurs and angel investors better understandthe issues they need to discuss with their attorneys and accountants.
ACE-*Net* operates under a no-action letter the Securitiesand Exchange Commission issued on October 25, 1996. Companieslisted on ACE-Net can utilize the SEC's revised small businessexemptions (under Regulation A and Regulation D, Rule 504) andrecently adopted state securities small business exemptions. InApril 1997, the North American Securities Administrators Association(NASAA) adopted a Model Accredited Investor Exemption for stockofferings to accredited investors. In states that have adoptedthe model language, ACE-*Net* companies have minimal regulatoryburdens. With the revised exemptions from the SEC and NASAA, agrowing number of both law and accounting firms see ACE-Net asan effective and efficient way of helping entrepreneurs and angelsattain their goals and fulfill their dreams.
For more information about the SEC no-action letter, visit theACE-*Net* web site through the SBA's Office of Advocacy:**www.sba.gov/advo**. Some of the details you will find onthe ACE-*Net* web site include -- the model terms and conditions of securities offerings;   - detailed search engines for angel investors to find entrepreneurs,including specific searches for minority- and women-owned businesses; a national schedule of events of interest to entrepreneursand investors, including meetings and conferences sponsored byservice providers such as securities attorneys and accountants;information about the angel capital market; 
- links to other home pages relevant to ACE- Net  and tothe investors and entrepreneurs that make up the network; and subscription information and forms for becoming a part ofACE-*Net.*

**ACE-*Net*Network Operators**
The network operators are not-for-profit organizations with yearsof experience helping entrepreneurs and investors. With ACE-*Net,*they are expanding this important service to a national audience.You can find a list of the network operators on the ACE-*Net*web site, accessed through **www.sba.gov/advo**. Once
you are in the Ace-*Net* home page, click on SubscriptionInformation and then Investor Enrollment or Entrepreneur Enrollment.
**Resources for the Investor and Entrepreneur**
***For More Information***
Information is power. Make it your business to know what is available,where to get it and, most importantly, how to use it. Sourcesof information include:
***The U.S. Securities and Exchange Commission***- SEC web site: www.sec.gov. Office of Small Business Policy: (202) 942-2950
***North American Securities Administrators Association***- NASAA web site: www.nasaa.org Telephone: (202) 737-0900
***U.S. Small Business Administration***- SBA District Offices SBA OnLine (electronic bulletin board)Business Information Centers (BICs)
- One-Stop Capital Shops (OSCSs)* Service Corps of Retired Executives (SCORE)Small Business Development Centers (SBDCs)
- Export Assistance Centers (USEACs)* Women's Business Centers (WBCs)SBA Disaster Assistance Offices
* Inquire at your local SBA office as to availability.
The SBA has offices located throughout the United States. Forthe one nearest you, look under "U.S. Government" inyour telephone directory, or call the SBA Answer Desk at
1-800-U-ASK-SBA. To send a fax to the SBA, dial (202) 205-7064.For the hearing impaired, the TDD number is (704) 344-6640. Forinformation on your rights to regulatory fairness, the telephonenumber is 1-800-REG-FAIR.
To access the agency's electronic public information services,you may contact:
***SBA OnLine:** electronic bulletin board (modem and computerrequired)*- 1-800-697-4636 (limited access) 1-900-463-4636 (full access)- (202) 401-9600 (D.C. metro area)   ***Internet:** using uniform resource locators (URLs)*- SBA home page: www.sba.gov SBA gopher: gopher.sba.govFile transfer protocol: ftp.sba.gov
- Telnet: telnet.sba.gov Business Advisor: www.business.govSBA Office of Advocacy: www.sba.gov/advo

You may also request a free copy of *The Resource Directoryfor Small Business Management,* a listing of for-sale publicationsand videotapes, from your local SBA office or the SBA Answer Desk.
*All of the SBA's programs and services are provided to thepublic on a nondiscriminatory basis.*
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