Angel investors are heaven sent

Access to funding is still a key challenge for the UK’s entrepreneurs. With the banks still convalescing and austerity measures beginning to bite, early stage and smaller businesses might be justified in wondering how they will raise cash for their expansion or survival.

Luckily, the business angel community is riding to the rescue. More and more private individuals are investing anything from hundreds to hundreds of thousands in entrepreneurial businesses, often helped by increasingly generous tax reliefs under the UK’s Enterprise Investment Scheme (EIS). If you have a sensible vision, a strategy that’s capable of delivering long term value and a well thought out business plan, a business angel might be the answer to your funding prayers.

Type “Angel Networks” into Google and you’ll get millions of results. There are a large number of formal and informal networks to choose from. Some, but not all, can be found via the British Business Angels Association’s member directory – see

Take great care when selecting your angel. Some will want to be heavily involved in your business and some won’t. Find out who else they’ve invested in and speak to the management about their approach. This is likely to be a long term relationship so characters and attitudes are important. Advice from a friendly mentor may be welcome but you won’t want to find yourself in partnership with an interfering or controlling individual. Building a business is hard enough without having to manage difficult and potentially destructive relationships.

If you are talking to Angels, try to look at things from their perspective. In particular, remember that you only get one chance to make a first impression and that, given the risk profile of early stage businesses, investors will take some convincing. Lack of vision, strategy, scalability and passion will be big negatives, whereas a well thought out and fully researched business plan, high barriers to entry and a sound grasp of the projected financials and cash flows will be strong positives.

Finally, don’t overvalue your business and don’t forget to focus on how they’ll get their money back. A vague idea that you might like to pay them some interest or buy their shares back at some future date is unlikely to be attractive.

For further information see


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