Business Angels nurture your Business Ideas...
Angel Investment Network
Since the angel investment pattern has become a big hit in the UK, it is quite understandable that their networks are already set up. Business angels are people or organizations who offer to give a startup capital, often called as seed capital, to a promising entrepreneur with a great business plan. The idea is to invest money in the budding enterprise and reap its returns when the business starts booming. Angel investors in the UK are known to have earned more than 10 times what they have invested in merely 3 years, and the median return on investment is 2.2 times over 3.6 years, which is not a bad deal at all. That’s the reason why angel investment networks are set up in the UK. It streamlines things. If a single investor doesn’t have the funds for investing in a particular plan, someone else from the network could step forward and the ball can be kept rolling.
If you want a simpler description of an angel investment network, you could consider a team of very wealthy people with great business acumen who want to invest their money in promising new projects spearheaded by promising young businesspersons. These people may be just 2 or 20 or even more; the concept is that they come together and may even pool their resources if a large investment is demanded. Each of these persons may be a businessperson him- or herself or they could be just wealthy investors who know where to put their money.
With more than 4000 business angel investors in the UK currently, it is understandable why there’s a lot of networking going on among them.
How Do Angel Investment Networks Help?
- Firstly, there’s the big advantage that there’s a lot of money pooled in to invest. If a particular entrepreneur has a business plan that requires a lot of investment, it is still possible to raise that much seed capital through such angel investment networks.
- For angel investing to work, one of the main things is that the potential investor must like the business plan. This is a very tricky affair because everyone has their own likes and dislikes. Even if the plan is superlatively constructed, it is a possibility that several entrepreneurs might turn it down because they are not very much satisfied with the plan or just because they don’t have an interest in that kind of venture. However, when we speak about an angel investment network, there are several people grouped together in a team. It is possible that a few of them will like each and every plan that comes their way. Hence, the chances of finding an investor are definitely elevated when you are dealing with an angel investment network.
- Another crucial thing is the experience that the budding entrepreneur can get. A lot of investors together mean a lot of accumulated experience. You should note that angel investors aren’t just investors. They are people who are intricately interested in the starting up of the business and in achieving success. They want profits to come in. Hence, they will even bend backwards if needed to make a business run. They will give tips and advice right from the conceptual stage of the business and will also hold annual board meetings and similar events to keep track of the business. All this helps the entrepreneur vastly, and the assistance is immense if it is an angel investment network that the person is dealing with. A network of super-intelligent businesspersons can be a whole new learning experience for the entrepreneur.
- Dealing with an angel investor network also means that there is a smoother flow of things. Since the entrepreneur is likely to get a lot of support (monetary and otherwise) through the network, it is certain that the documents and other protocol will move along faster and the business will be able to see the light of day sooner. A single angel investor can also make that happen, but the chances are definitely enhanced when a network is brought into the picture.
How to Find an Angel Investor Network in the UK
Actually speaking, it is easier to find an angel investor network in the UK than finding a single angel investor. These business angels find security in numbers—they also have to make sure that their money is being invested in the right place. For that reason, they become parts of networks. For finding a single angel investor, you might have to ask around other people and that could be too tedious, but if you are trying to find a network, you could even get one by a simple search on the Internet through a search engine like Google.
Most economic and business associations in the UK have some or the other active angel investor networks. So, another way to find these groups is to communicate with such groups. You could ask these associations directly or find out from your other business friends in the area who might have possibly got funded through a particular network. If you get such word-of-mouth referrals, it could be better for you because you could also get an idea of how the network really operates.
Once you find such a network, you don’t deal with the investors themselves, but you deal with their ‘office’, which could be a mere website if you have found them online. Check to see that the website is genuine and then submit your proposal. Most people feel that the proposal stage is the most important stage of finding an angel investor. If your proposal is genuine and it shows that you have some kind of foresight for your business, it will be accepted and will be sent to the investors.
At the next stage, the investors scrutinize your business plan. They confer, discuss and decide. Not all investors might want to go ahead with a particular business plan, but if someone does, things can proceed through further discussions.
That’s the basic way in which angel investment networks work in the UK. But, as with anything else, it is important here as well to find specific information and then go ahead concretely with your plan.