Business angels are high net worth individuals who invest on their own, or as part of a syndicate, in high growth businesses. In addition to money, they often make their own skills, experience and contacts available to the company. The individual amounts invested by Business Angels are usually in the range of €25,000 to €250,000 although syndicated deals (where a group of angels invest together) can be up to €1m. In return for their investment they take an equity stake in your company and usually expect to exit their investment between 3 and 7 years. They are often successful entrepreneurs in their own right and may even work to strengthen your management team.
IS IT FOR ME?
Business angel finance may be right for your company if traditional sources of finance have been exhausted or are if they are not available (e.g. bank finance, founders own capital, government assistance). You may also find that Business Angel finance could be an option if the amount you are looking to raise is considered to be too small by venture capital firms. Ideally, your company should have high growth prospects and the ability to exit after a certain time frame is also required. You must be prepared to share ownership of your company with external business angel investors.
WHERE SHOULD I START?
- To be considered suitable for investment by a business angel, you should have a detailed business plan or investment memorandum available.
- You may also be required to make an ‘investment pitch’ to a group of angels and if they are interested in investing a series of further meetings will usually take place between the company and the angel(s).
- You may have access to angels through your own personal contacts or you may choose to contact the various Halo Business angel networks which are based across the island of Ireland.