Business Angels
Business angels are private investors who have both money and time to invest in companies that may be too young or too small for venture capital support.
Usually they invest between £10,000 and £250,000 in return for an equity stake. Alternatively, some are prepared to make loans, i.e. offer debt not investment for an agreed period. This is not the standard arrangement but an advantage of the business angels system is flexibility.
In addition to the expectation of investment growth, a business angel may want a role in the business, perhaps as a type of director, as a consultant or as a paid employee. As with venture capital , only companies that will grow by 20% or more annually are likely to be suitable. Most angels have substantial business experience to bring to the company. Business angels sometimes join an angels syndicate to increase the size of their potential investment pool.
One well-established angel network is LINC, a nationwide organization based in London. Companies send their business plans to the nearest LINC agent, who assesses the plan and meets the management, After paying a joining fee, the company will be put in touch with a nationwide database of investors and is also given the opportunity of making a presentation to potential investors at locally-held meetings.