What are Business Angels?

Business Angels are wealthy, entrepreneurial individuals who will provide capital to a small company in return for equity, thereby taking on a large level of risk. Generally they invest in companies requiring funding up to £1m and enjoy being actively involved in the business. Finding an Angel is often informal or through word of mouth but there are a large number of Angel Networks who will put on events aimed at introducing businesses to Angels. Some Angels networks will charge a subscription to attend events.

Top Tips:

  1. Clubs will show you businesses and business ideas but spend/invest your money wisely.
  2. Due diligence is the be all and end all for angel investment, you will have to conduct your own due diligence and seek your own legal advice.
  3. Networks are not recommending opportunities only presenting investment opportunities, so just because an Angel Network is showcasing a company it does mean it is investment ready.
  4. As this is a high risk area the Angels will expect a larger equity stake than normal.
  5. The Angels will be looking for an exit route (ie a floatation or sale) in order to maximise their investment.
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