Alternative Finance: a guide to angel investment

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An angel investor brings many benefits

As well as providing companies with an injection of cash, those who invest their finance often have a lot of time to give to those they invest in as well as having a range of experience that can be used to help the business progress.

What support is available?

The majority of individuals who become Angel Investors do so because they have a wide range of experience within the business sector and are looking to impart this on other businesses to help them grow. This means that they are not only a fantastic resource in terms of funding, but also as a point of contact when troubleshooting how to develop the business in the future.

Their passion and previous experience will also mean that they bring a wide-range of networking opportunities to the table having already forged relationships with potential suppliers and customers that your company can utilise.

In return for investment Angels will generally demand to own a percentage of the company – although often these shares will be a minority stake. The amount that they will require will often depend not only on the investment, but on how hands-on they will be in the day-to-day running of the business.

What should businesses do to get investment?
The most important thing for those wishing to seek investment from angel investors to do is to make sure to make the right first impression. While the business plan is important , those seeking this form of investment will have to build a strong relationship with the individual behind the money.

Speaking at The Business Show in May, Bill Morrow, founder of Angels Den said: “You need to know what your business is about and where the money is going to come from. When asked ‘what is your business about’ 36% of people won’t have an answer.”

“If its just money you want, then angels funding isn’t for you. Only apply for the funding you need – not simply the funding you want. That’s why women are 2.2 times more likely to receive funding.

“A lot of angel investors invest for something exciting to do – so the importance of communicating that pattern can not be under-estimated.”