Business Angels
Business angels are wealthy individuals who provide businesses with long-term equity capital at seed, start-up, and early stages of business development. There are an estimated 18,000 business angels in the UK, and it is believed that they invest around £500m each year in approximately 3,500 businesses. A typical UK business angel makes one or two investments over a three year period, committing amounts of anything from £10,000 to £250,000 in a single investment. Two thirds of business angels invest under £100,000 with the average investment being £25,000.
Most business angels are experienced business managers, who can offer valuable expertise. In fact, their involvement in a business can even attract more investors. Some angels seek involvement in the business, offering their commercial skills to help the business achieve its objectives. Such investors take an active role in managing the business in over 80% of cases.
Could a business angel be right for your business?
If you are considering whether a business angel could provide the most appropriate form of private equity for your business, you should first consider the following questions:
- Does your business have growth potential?
- Is your business at seed, start-up, or an early stage?
- Are you looking for long-term equity finance?
- Is your business able to offer at least 20% return on investment?
- Are you willing to give up a minority stake of equity to a business angel?
- Is the size of required investment in your business in the range of £10,000 to £100,000?
- Will your business benefit from the knowledge and experience of business angel?
- Are you willing to offer a management position to a business angel?
We can advise you on any issues concerning the raising of capital via, and working with, business angels. We have a list of individuals seeking investments and can identify those that will meet your business requirements.
How can we help?
We will assist you throughout the process and can offer the following:
- advice on the proposed transaction, its structure, and its suitability for a business angel arrangement;
- a time-schedule and plan of the transaction;
- preparation of a business model;
- Preparation of a proposal;
- assistance and preparation of a business plan and financial forecast;
- an assessment of funds required and advice on the use of funds;
- a list of business angels to approach, and assistance with initial contact;
- support in the presentation of a business plan and proposal;
- negotiation of terms;
- additional services such as tax advisory, arrangement of contact with law firms;
Supporting you from start to finish
It is important that from the outset, consideration is given to whether or not fundraising via a business angel is actually the most suitable course for your business. We have experience in raising capital for young businesses, and so are able to quickly and accurately decide which alternative is the most appropriate for you.
Although information about specific business angels is hard to find, through our network of capital providers we are able to identify those who are most likely to be interested in your investment offer. The majority of business angels prefer to invest into businesses operating in industries in which they have existing experience.
The initial approach and first meeting are key; business angels want straightforward deals and expect clear and professional business plans and financial forecasts. We can these with reasonable and sound assumptions. We will ensure that you are equipped to present the best developed business plan and financial model, to assist you in securing the capital required for your business.
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