Business angels (BAs), also known as informal investors, are wealthy individuals interested in investing their own funds in growing
companies. While they are normally business people, they could also include wealthy family members or friends.
BAs typically invest in businesses with:
» an investment need of between £10,000 and £250,000 - most initial investments are less than £75,000
» the potential for high return - BAs are not averse to high risk
» good early stage development or expansion
» a presence in a particular sector
The advantages of using a business angel are that they often make an investment decision quickly, without complex assessments.
However, it is still a good idea to spend time drawing up a professional and tailored business plan.
Most business angels can bring valuable first-hand experience of either working in a small business or running their own business venture.
They are also likely to have local knowledge, as they tend to focus their investments within a small geographical area. For larger
investment deals, they may collaborate with other business angels.
The disadvantages of business angels are that they do not make investments very regularly and they may not be actively looking for an
opportunity, so they may be difficult to find. While you may decide to approach an agency to help you with this, business angels will
place a lot of emphasis on your relationship and how well you can work together directly. Tracking down the right investor may take longer
than expected and can typically take several months.
The National Business Angels Network (NBAN) will direct you to local and appropriate business angel networks and provide guidance with
preparing and presenting your business proposal. You can read about business angels on the National Business Angels Network website.
