Angel investors are wealthy individuals who offer finance to businesses in return for a share of equity. They usually give advice as well as funds, often for start-ups or ventures at an early stage.

What is angel investing?

Angel investing is the largest source of funding for start-up and early-stage businesses seeking equity to grow. As a form of equity finance, angel investing is made by wealthy individuals, or groups of individuals, who invest their own money in return for shares in the business.

These investors – known as business angels – make their own decisions and invest on a private basis. In so doing, they usually want to meet business owners face to face and hear them pitch their business. In addition to funding, business angels will also provide experience and expertise to support the business and maximise the chances of success, even taking a role on the board.

Angel investing is often called “patient capital”. Investors tend to take a longer-term approach of between three and eight years. This makes them more willing to support a business as it grows, rather than look for quick ‘in and out’ returns.

How much do angels invest?

Business angels typically invest anything from £5,000 to £150,000 in a single business. However, these investors increasingly work together in syndicates, allowing larger amounts of funding to be raised.

Where to find an angel investor

The UK Business Angels Association (UKBAA) represents around 100 organisations. They include the vast majority of business angel networks across the UK, over 20 early stage venture capital funds, and professional service providers and advisers, such as accountancy and law firms, corporate financiers, banks, universities and public policymakers.

Click here to visit the UK Business Angels Association

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