What Is Angel Funding
Equity or Angel funding is a lump sum of money paid for a share of the entrepreneur's business, but thereafter it is far from simple. Unlike debt funding, the Angel shares the risks with the Entrepreneur. Business Angels take the highest risk of any other investor and fund their investment out of their own pocket, not via other stakeholders. They invest at a very early stage of the business development and, as a result of this level of risk, usually take a higher share percentage.
By investing in the business the Angel is helping to make the business succeed but they are also gambling on the ability of the management to generate rapid growth. A Business Angel is likely to be a successful entrepreneur in his or her own right, able to add value to his or her investment with experience and knowledge. Angels rarely invest altruistically and seek to get a good return on their investment on a planned exit. Statistics verify that the number one cause behind successful early stage companies is the value added from Business Angels.
The Angel will want to realise his or her investment, typically, in 3-5 years, which is usually achieved by a trade sale, MBO, re-financing or, very rarely, an IPO. A small but increasing number of Angels are grouping into networks or investment clubs to share research and pool their investment capital.
Angels are particularly interested in the capabilities of the management team and their realism with regard to valuation. Complete start ups are much less valuable than an existing business generating revenues with an experienced management team.
idea, Contact us on 0845 051 3850 or
E-Mail us at: info@cebangels.com
Click here to join our Network for free