If you’re looking to take your business to the next level, you need to think outside the box, never being afraid to try new things and experiment with new ideas.
To help your business get to that next step, it’s likely that you’ll need a little helping hand in the finance department. This can take the shape of a loan or an investor, or even from peers and strangers on crowd-funding platforms.
For small business growth, the use of angel investors is increasingly common as in testing times banks are less inclined to part with their cash. To find out if your business should look towards angel investment, read on for our simple guide to angel investors for small businesses.
What are angel investors?
An angel investor is an investor who takes an equity stake or shares in your business and, in return, gives you the required funds that you need to take your ideas to the next level. They also often give you more than just money, as they share advice and knowledge based on their own experiences in business.
While the money is important, it is actually this mentorship that can be the most valuable aspect of any angel investment partnership.
Sometimes groups of angel investors will work together for a business and create a syndicate. With this, you often get a lead angel who will be the most active in your business, and other angels that will take a more passive role in the decisions being made and suggested.
Who are angel investors?
Usually, angel investors are individual investors who have a certain amount of personable disposable finance that they want to use to invest in projects or businesses that interest them. Angel investors have a greater responsibility for their investment choices and make their own decision on whether to invest or not.
In return for their investment, they take an equity stake or shares in your business, and as a result they are keenly interested in the health and success of your firm. They can often play an active role in developing your business and helping it to become a success, as this benefits both you and them.
Is an angel investor the right choice for me?
For many start-ups and young businesses, private equity plays a crucial role in helping them to grow. In fact, in the UK alone around £1.5 billion is invested by angel investors annually, and there are an estimated 18,000 angel investors actively supporting small businesses.
If you’re looking to grow your business with the expertise and aid of someone who truly knows the industry, an angel investor will be the perfect partner for you.
Thinking of pitching to angel investors to help get your business of the ground? Or are you looking at other forms of funding? Drop us a comment in the section below and share your experiences with the Pandle community!