Friday, October 5, 2007

Getting Angel Investment for your business

There are few things more frustrating then having a great business idea, a ready business plan but not being able to find the business funding with which to start your business with. If bank funding was your first option and you simply cant find the right deal with the bank then rest assured there are still a number of other options available to you. One of these are called Angel funding, provided by individuals or groups called business angels.

As business angels are people who have generally already made their fortune through other ventures they could prove vital to the success of your business. They could bring you everything you need to get your business off the ground; the main thing being the money needed to start your venture up. As business angels are wealthy individuals they will invest in new business ventures that are considered high growth. Their reason for doing this is to gain a high return of the profits that the business makes. This means the investment that a business angel provides is a risk, as there is no guarantee that your business is going to be successful. Due to this fact a business angel will not only be investing money into your business; they will also do everything in their power to make sure that your business becomes a success.

In order to help make your venture a success money isn’t the only thing being brought to your company. These angels will also invest their skills, time, experience and the contacts that they have built up. So you will not only have access to all of the money that you need to successfully run your venture but you will also have all of the help that you could ever need right at your fingertips. Sound good?

Angels are a fundamental tool. They are needed to fill the gap that exists between venture capital and debt finance. They are imperative to the success of start-up ventures and early stage companies. There are however certain points that you need to keep in mind. To use the help of an angel your investment needs should be between R10,000 and R750,000; your business also needs to have a good early stage development or expansion plan and certain angels will only invest in particular areas of business. Basically in order to attract the attention of a business angel your business plan needs to be clear and you need to be able to demonstrate how your business will make money. All of your facts and figures need to be accurate. The reason why aspects such as these are so important is down to the fact these investors won’t put their money and time into something unless they feel it will be worthwhile; your venture needs to appeal to them.

If you do attract the attention of a business angel my advice to you is to spend time with your investor so you can see if you have a solid relationship with each other. It will also ensure that your business idea matches the skills that they have.
If you do take on board the help available from such an investor then the way it works is they will own a percentage of your business so when your venture starts to bring in money, a percentage of this money will be making its way across to your investor. This is however a small price to pay for the advantages that said investor will be bringing into your business.

Thank you to angel startups for their contribution to this article

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