FAQ
What are Business Angels?
These are often successful entrepreneurs themselves, or they may have been senior managers from industry. A common thread is that they are looking for the opportunity to invest in ambitious, fast-growth businesses.
Who needs them?
Any company can benefit from their involvement but Business Angels are particularly useful for:
- Early-stage and growing businesses that do not have enough capital of their own.
- Companies whose equity requirements are too small for venture capitalists.
- Growing businesses that need to strengthen their board or management team.
How much is Available?
Collectively, many millions, but individual Business Angels tend to invest in the range £20k to £200k. The general range of an investment in a company, which may be from a consortium of angels, is often £50k to £500k but there are exceptions.
What can they Offer?
- Long term finance – with no immediate repayment burden. If your company succeeds the Business Angel will share in this growth. If your company fails then the Business Angel will lose his or her funds.
- Business skills and experience. Business Angels tend to invest in sectors they understand and they can bring additional benefits e.g. contacts and particular experience.
- Credibility and leverage. Having a Business Angel involved can influence other financiers. Aside from the contacts and experience they bring equity/finance- not debt finance - so your balance sheet is immediately strengthened.
What kind of Business can get this investment?
Business Angels invest their own money and where they invest will depend on their own preferences and criteria. Collectively though, they look at any industry sector and all stages of development, including start-up, growth and even refinancing.
The halo angels have indicated that they wish to see a wide range of opportunities. These will of course include high tech, high growth potential start-up companies. However existing companies who wish to expand, low tech companies and even companies in some form of distress may all be considered.
How do I find them?
Often with difficulty - through personal contacts of your own, through your accountant, solicitor or banker. Or more simply through halo.
What is the Success Rate?
Nationally, it appears that approximately one company in three who get to pitch to business angels will win their investment. However this figure varies widely and will depend on many factors. Clearly the odds are improved if you are able to pitch to a larger audience of angels, typically at a halo meeting this will be over 50 angels.
Is There Much Work Involved?
Yes! Even if you already have a solid business model and financial plans prepared, there is still much to do. The pitch to business angels is not the same as a pitch to a bank, INI or even a VC. You will have to rework and rehearse your pitch aimed at the particular halo audience and strictly within the set presentation framework. And once the evening event has hopefully generated some interested angels, you still have to meet them and their advisors, present in much more detail and of course negotiate and pass due diligence. It is very hard work, but worth it to win this type of investment.
How Do I Apply?
Go to the halo
Entrepreneur page and read the information about the criteria for companies which may be suitable for angel investing. If you believe you match these, fill in the Short Application Form. This will allow a quick go/no-go decision to be taken by halo. Only after halo have indicated that you may be suitable should you take the time to fill in the Full Application Form.