Business Angels and the Capital that you need
Business angels are high net worth individuals; they form another way of gaining finance for businesses. Business angels form part of what is known as equity finance. This equity finance is money that is invested into a business that doesn’t need to be repaid. Business angels are one of the most popular forms of equity finance and in recent years more and more people are realising the benefits of using the help of a business angel.
Business angels are established entrepreneurs who have already built up their own business. They are typically men over the age of 35 but there are no strict guidelines as to who can and cannot become a business angel. The majority of these business angels make investments for financial reasons; however in many cases there are often other factors as to why business angels wish to make a contribution to a business. These reasons include things such as they wish to take part in the entrepreneurial process and to have the enjoyment of being part of a successful investment.
It has been estimated that business angels invest roughly £300 million every year into established and start-up businesses. It is also safe to say that the majority of these investments happen at the start-up stage of business rather than later on in business. Typically, Business Angels invest between £10,000 and £750,000 in an investment. Where larger amounts are invested in a business, this may be as part of a syndicate organised through personal contacts or a Business Angel Network.
When it comes to the type of business that business angels invest in it should be noted that business angels invest across most industry sectors and stages of business development; however many business angels especially invest in early and expansion stage businesses. Most business angels prefer to invest in companies within 100 miles of where they live or work. Investors in technology companies tend to be more prepared to travel longer distances. One thing that is certain is that business angels rarely have a connection with a company before they invest but they will often have experience of the industry sector that they will be getting involved with.
If you are either a start-up business who needs start-up finance or you are an established business who needs extra finance for a specific purpose then a business angel could be just what you are looking for. A business angel can bring not only money to a business but by using the help of a business angel you are also gaining help in the form of experience, contacts and additional skills to a company.
Not all businesses are often able to gain the help of a business angel. Your business/company has to have a decent history and you need to prove that you will be able to establish yourself. There are certain aspects that business angels will look at within your business to determine whether you are eligible to gain the help of a business angel. These aspects are things such as:
• The expertise and track record of the business founders and management team
• The competitive edge or unique selling point of the company
• The characteristics and growth potential of the market your business is in
• Compatibility between the management, business proposal and the business angel’s skills and investment preferences
• The financial commitment of the entrepreneur
If you are interested in gaining the help of a business angel it is important that you get in touch with a financial company who will be able to put you in touch with a business angel who will be able to possibly help your business.
Helen is the web master of Edge of Bankruptcy, who will provide you with all of the information and advice that you will need concerning the help and investment of a Business Angel.
Business Angels and the Capital that you need / Author: Helen
