Angel Investment - the basics...

by Startacus Admin

Thinking of seeking Angel Investment? We give the rundown on some of the basics that you need to know...

When you’re trying to get a business off the ground, the primary focus, at least initially anyway is usually money related. Getting those all essential funds together can be one of the most difficult tasks of all - difficult, yes, but certainly not impossible. From banks to crowdfunding, there are a whole host of
options that you can choose to help you get on your feet. One option which is starting to become increasingly popular is the fancifully named Angel Investment. To help you decide if it could be something you could consider, we’ve put together a basic rundown of all that you need to know.

What is an Angel Investor?
Usually an Angel Investor is an individual who generally comes from a business background who has capital resources that they want to invest in another business, typically in a business that is in the early stages of development. They might have a proven track record in a particular market sector, be a seasoned entrepreneur themselves or simply be looking to maximise their own earning potential. Regardless of what their background though, they fundamentally want to invest money in a business to help make sure it succeeds - it’s in their interests after all.

What do they offer?
Generally Angel Investors offer financial investment of anything from £10000 up to £750,000 in a business. Of course in return for this investment, you do have to give up some of the equity in your business. As well as the financial benefits though, Angel Investors can bring invaluable mentorship and other skills to your business and also can open up many new doors in terms if networking opportunities. It’s important to remember that some Angel investors are quite hands on with any business that they invest in whilst others prefer a more “silent partner” approach.

What do they look for?
Angel Investors look for a business or an idea that looks like it will succeed. An Angel wants a good return on their investment and will generally not take the risk on a business idea that isn’t thoroughly thought out. Whilst an Angel investor can offer expertise and skills, they don’t want to end up doing everything. Business plans that have been properly created, medium and long term business strategies are essential criteria if they are going to part with their cash. Being able to clearly identify your business’ USP and also being able to prove that you fully understand your target market and your competitors is a must also. When pitching your business to an Angel Investor, the most polished and slick presentation will mean nothing if you haven’t got the practical business elements thought out properly.

Where can Angel Investors be found?
There are lots of portals and platforms now where you can start engaging and forging relationships with Angel Investors. Some of the main sources include The British Business Angels Association, the Angel Investment Network , Angels Den, the Irish Investment Network and the Halo Business Angel Partnership.

We’d love to hear from you if you have yourself used an Angel Investor to help start or grow your business, or if you are an Investor and would like to share some tips, advice or words of wisdom on what it all entails. Do let us know over at the forum...

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Published on: 2nd October 2012