Angel Investment

Angel investment explained
Angel investment explained

Generally these companies are in the start-up or early stage and investments can be made as individuals or as part of a group.

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 the right first impression. While the business plan is important, those seeking this form of investment will have to work closely with the individual behind the money – so it is important that this individual believes that they can form a close working relationship.

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 per cent of people won’t have an answer.”

“If you just want money alone then angels funding isn’t for you. Only apply for the funding you need - not simply the funding that you want which is why women are 2.2 times more likely to receive funding… A lot of angel investors invest for something to exciting to do – so the importance of communicating that pattern cannot be under-estimated.”

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 receiving 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 and the amount they require will depend – not only on the investment, but on how hands-on they have to be in the day-to-day running of the business.

In tomorrow’s instalment of the alternative finance series, we take a look at crowdfunding…