A more personal form of funding, business angels are high net worth individuals investing their own disposable finance in a cause worthy to them. Acting on their own or in a syndicate, they can also bring valuable experience and guidance to a growing business.
Angels seek opportunity
Business angels look for investment opportunities where companies are showing the potential for growth. They provide financial backing to start-ups and early stage businesses as well as to established businesses looking for expansion capital.
Angels will often facilitate a high-risk investment where the potential for an excellent return is clear.
Key points to consider
- Business angels often invest between £10,000 and £500,000 in a single venture
- Angel syndication can raise this to deals of up to £2m
- A return on investment is expected over a period of 3-8 years
- Angel investment can work alongside other sources of finance to boost the pot
- There are costs associated with securing angel finance
- You need an exit plan in place for the angel, allowing them to leave the business
“I was the lead-in investor and required additional funding to complete the acquisition. Some of this was found from within the client’s existing senior management team, and Pegasus obtained the additional £100,000 required via two investors from its Business Angel network. I recommend Pegasus.”