Who or what are business angels?
Business Angels provide business funding from private, unregulated sources. This could satisfy a need for capital investment that cannot be raised personally by the business owners themselves, or raised by way of loans from banks etc. Business angels funding is money that investors put into a private company in return for a shares in the ownership of the business. It is also called ‘equity finance’ and because this type of finance is reliant on shares of the company being used as equity, it is not available to businesses that operate as sole trader or partnership.
Business Angels are usually wealthy people with a high net worth, they are private individuals, or groups of investors, looking for opportunities to invest money in businesses with the aim of making a substantial financial return.
A typical, business angel may have owned their own successful business in the past, or they may be experienced executives who have been made redundant and wish to find another job by investing in to someone else’s business as a business angel.
Business angels often invest in businesses during the start up or expansion period and they may invest either alone or as part of a syndicate. As well as money to invest, they often have a wealth of commercial experience and, if they have earned their wealth by building businesses themselves, they may also bring their contacts with them.
