Business Angels Vs Venture Capitalists

by on December 15, 2012

Have you these amazing ideas which you’re sure you can put into practise and make a living out of your ideas. If so you’re more than likely looking into financial help to put these ideas into practise. You may think bank loans, credit cards and loans off family and friends are the only options but Business Angels and Venture Capitalists are also a good option to consider.

There is a difference between Business Angels and Venture Capitalists this is that Business Angels take less control of your business they don’t usually want the bother of a director’s or management job and would rather invest in your business and give you some advice if you need it. Due to this, their investment decisions are usually a lot quicker than Venture Capitalists.

We are often asked if there are business sectors which our business angels prefer. Equally frequently we are asked whether there are areas which they will not touch. The quick answer to this is no, not that we have noticed. Undoubtedly individual investors have their preferred sectors; those where they have specialist knowledge, contacts and experience.

Business angels often contribute more than just finances to a new business. They offer their advice and experience as well. While many new business owners may not like giving control of much of their business over to a business angel, the experience and expertise gained is extremely valuable to the new business entrepreneur. The business angel business angels uk has accumulated wealth, and therefore has proven that he is able to succeed in business. This level of understanding is invaluable to the new business owner.

Be persistent – a successful business takes lots of time and hard work.

They’re always on the lookout for an investment opportunity, and are especially drawn to high-growth businesses where the risk is high, but so is the potential for returns.

.You should have a strong and responsible management team. The team members should project enthusiasm, patience and courage to go forward.

One of the best ways to find business angels is to simply stay connected with professionals in your local area. You never know who you are going to find when you get your name out there and begin to let people know that you are interested in finding an angel.

Another option is to borrow money from family or friends. If you’re doing this, the best and fairest way to get them on board is as investors, making sure that they have the chance to share in your success but also warning them of the potential pitfalls. Make sure they are clear on the nature of the risk they are undertaking many friendships have been broken down the years due to money. It’s often a good idea to put your agreement in writing, just so there is absolutely no misunderstanding further down the line about the terms on which you borrowed the money. It’s up to you to be honest about your chances of success and to give them all the information they need.

Business angels will invest across most industry sectors and stages of business development. They tend to generally look for the following within your business as a basis of whether to go ahead with an investment:

The expertise and track record of the management Your businesses competitive edge or unique selling point The characteristics and growth potential of the market Compatibility between the management, business proposal and their skills and investment preferences

Business angels are more than just a ticket to getting funding for your business, they are highly experienced business experts who bring a wealth of experience, contacts and knowledge to the table. Unlike venture capitalists that are simply searching for really big investment opportunities, typical business angels invest smaller sums of money such as 30,000 to 100,000 dollars. Prior to investing funds to your business, a business angel will assess the idea very carefully and will need to be CONVINCED on different scores. It really pays the angel to be very pessimistic and instead of papering over the cracks, he or she will look at the very best ways to fill up the cracks. He or she will bring the knowledge, skill and experience of running a business such as:

Comments on this entry are closed.

Previous post:

Next post: