Business Angels

Business angels are private investors who have both the money and the 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 and sometimes join an angels syndicate to increase the size of their potential investment pool.

See Also: Stockmarket Centre

Last Updated: May 2007 © Moneyextra.com

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