WHERE LOCAL BUSINESS GROWS

Business angels



Overview
 

Business angels invest in businesses in exchange for a share of the business’ equity. Most business angels invest between £10,000 and £750,000.

Business angel investors usually invest in start-ups or young businesses that need to fund activities like product development or market expansion. They can make investment decisions quickly but will still need to see that you have a good business plan before they commit.

Business angels may take an active role in your business and can be a useful source of knowledge and mentoring.

The process
 

Your business should be ‘investment ready’ before you apply for funding.

You should have:

  • a business plan
  • audited accounts for the past two years
  • evidence of current performance
  • a profit-and-loss forecast for next year
  • business bank statements for the past six months
  • profiles of each partner or director in your business
Pitching to business angels

Business angels are more likely to be interested in your proposal if they:
  • understand the product or service
  • have worked in the same industry
  • are confident that your business is well managed
  • feel they can bring added value to your business
  • are not being asked for a huge investment, or repeated investments
When pitching your business plan to a business angel you should cover:
  • the benefits they would gain by investing
  • details of the investment required
  • terms of the proposed deal - eg share of control, skills you offer and timescale of investment
  • how your management team will implement the plan
Finalising the business angel investment deal

It can take several months to finalise business angel deals and for funds to be transferred. You should also allow for additional finance to cover legal fees and bank charges to arrange debt.

Legal elements of business angel deals include:
  • the investment and shareholders' agreement - sets out the terms of the investment and regulates the shareholders' relationship
  • the service agreement - eg employment contracts with managers or directors
  • other contracts - with more junior employees, suppliers, or customers
  • the disclosure letter - details of any warranties or assurances agreed between the parties
  • articles of association - your company's internal regulations
  • share options

Pros and cons
 

Pros

  • business angels are free to make investment decisions quickly
  • no need for collateral - ie personal assets
  • access to your investor's sector knowledge and contacts
  • no repayments or interest
  • business angels are invested in your business’ success and can help you explore new ideas
Cons
  • might not be suitable for investments below £10,000 or more than £750,000
  • it can take a while to find a suitable business angels investor
  • giving up a share of your business
  • less structural support is available from a business angels than from an investing company

Common mistakes
 

You may be refused business angel finance because you haven’t made sure that you are ‘investment ready’ before you approach potential investors. For more information, see Getting ready for funding.

You should also identify potential risks and how you might overcome them.

You could benefit by doing a SWOT analysis, which identifies your business's strengths, weaknesses, opportunities and threats.

Investors will want to know if there will be an exit opportunity and that they can recover their investment and make a profit. You should be able to tell them about your business’ long-term plans and ambitions.

Remember to prepare for difficult questions and stay polite and respectful during your pitch.

Funding sources
 

You can find individual business angel investors or syndicates (groups of investors) through business angel networks in the UK and Europe. These include:

  • Archangel Informal Investment – business angel syndicate of around 100 investor members
  • European Business Angel Network – the European trade association for business angels

Advertisements
Did you know...
Did you know you can advertise for free on the Hub by spending credits you've earned.

News

2 results found 
Yorkshire businesses get behind £10k fundraising campaign

Tuesday 04 April 2017

As preparations for the charity football initiative ‘The Match 2017’ continue to gain momentum, the latest supporters to get on board are Huddersfield-based businesses Magic Rock Brewing and Lindley Financial Management. The inaugural event, which will take place on Saturday 20th May at The MBI Shay Stadium in Halifax, will bring together footballing amateurs and Huddersfield Town legends, in a game that will help to raise much needed funds for Yorkshire Air Ambulance. Both firms have dug deep for the cause, and have each donated £500 in return for becoming an official shirt sponsor. With a running cost of £12,000 per day for the two yellow helicopters to remain active, the organisation relies entirely on donations to continue saving lives. And now further support is required to keep The Match proceeds growing, and help this initiative reach its £10,000 target. Magic Rock Brewing was founded by brothers Richard and Jonny Burhouse and inspired by brewing traditions and the US craft beer scene in particular. The award-winning and ever-growing company produces an innovative range of idiosyncratic beers in their 4,000sqft Tap Room, close to the town centre. When approached via social media and asked to get behind The Match, Richard says there was never any doubt about getting involved: “We are a community focused business, keen to support local initiatives wherever possible. We are aware of the excellent work the air ambulance does for the region, and wanted to do our bit.” Regular charity supporters Lindley Financial Management also had no qualms about signing up to help the event. The independent financial advisers, based in Brighouse, also support Pilgrim Bandits Charity, aiding soldier amputees injured in Iraq and Afghanistan. Commenting on The Match, director Mark Learmont, said: “I hope as many people as possible attend on May 20th. Nobody knows when they may need the help of the Yorkshire Air Ambulance – supporting them is vital and their services must be applauded.” Organiser, and founder of grassroots football specialists Coaches Club, Dave Learmont, adds: “I am so thankful that two local businesses have gone the extra mile to raise awareness and proceeds for this fantastic charity. 100% of all funds donated will go to Yorkshire Air Ambulance, and these shirt sponsorships put us well on our way to hitting our huge target.” But the search for sponsors isn’t over, with the players themselves now looking for individual support. For only £150, companies will secure their name and details on the official match website, alongside their logo on the programme. The players and Town legends are also appealing for members of the public to get on board and buy tickets. Available at £10 for adults and £5 for children, the aim is to provide a fun, low cost day out for all the family. Pre-match and half-time entertainment – as well as a couple of extra special guests – will be revealed over the coming weeks. All tickets must be purchased before the game, via justgiving.com/teams/coaches-club. Further information and updates about The Match and player sponsorship can be found at The Coaches Club website, and on Twitter @cccmatch.
Posted by Scriba PR
Vizulate becomes Approved Supplier on Digital Enterprise scheme

Friday 10 March 2017

Vizulate Digital is delighted to announce that we have been named as an approved supplier on the Leeds City Region Digital Enterprise scheme, which allows eligible small and medium sized businesses across Yorkshire to ‘Invest in Digital’. Running until March 2019, the Digital Enterprise scheme aims to support the growth and development of SMEs in the region through investment in digital skills and technology. Eligible businesses will be able to apply for 40% funding towards the cost of digital projects including digital marketing, social media, web design and development, e-commerce and more – up to a maximum of £5,000. The Digital Growth Vouchers could also fund part of the cost of technology upgrades such as IT and telecoms and, if approved, the business will then only have to cover the remaining 60% of the cost. The Digital Enterprise scheme is a partnership programme which is partly funded by the European Union (European Regional Development Fund), the West Yorkshire Combined Authority/Leeds city region Local Enterprise Partnership (LEP) and the 9 local authorities which form part of the Leeds city region – Leeds, Calderdale, Kirklees, Bradford, Selby, Craven, Harrogate, York and Wakefield. As approved suppliers on the Digital Enterprise scheme with over 10 years’ experience we are able to offer the full range of digital services including: Website Design & Development E-Commerce Digital Marketing Social Media Search Engine Optimisation (SEO) Online Advertising (Google AdWords, Facebook Ads etc.) Video & Animation Integrated Digital Solutions Web Hosting & Email Through our trusted partners we can also provide IT and telecoms solutions. We believe digital marketing represents the single biggest opportunity for businesses to achieve growth.
Posted by Vizulate Digital
2 results found 

Events Posted

2 results found 
Image for
Facebook Advertising Workshop
Thursday 27 April 2017, 09:30 - 12:30
Bridge House, 2 Woodhead Road, Holmfirth, HD9 6PX
£65 - 6 places
Image for
Business Hub Live - Innovation and Research & Development
Wednesday 24 May 2017, 08:30 - 10:30
Firth Street, Huddersfield, HD1 3BD
Free Entry - 50 places
2 results found 
Designed by Kirklees Council
Built and powered by Alcium Software
Close cookie policy popup window
This site uses cookies for analysis purposes only. This helps us understand how you and other visitors use our site. To see a complete list of these cookies or to opt out please access our cookie policy page.

You will see this message only once, but you will be able to find more information about our use of cookies or opt out at any time.