Usually the angel investors that work individually invest between £10,000 to £150,000 in the business. The businesses in which they invest the most are single ventures, and the amount of investment is determined by the expected needed growth of the business to be financed. However, the amount of investment may vary to the wealth an individual has kept aside for investment and the opportunity to avail.
The angel investors normally invest by being a part of the syndicate, which is a group of angel investors. All the investors in the group are highly experienced and skilled, and they pool their experiences all together to make a business grow in a better way. This means that other than the finance, the angel investors provide technical experiences to the business as well.
How much equity is exactly needed to offer in return for the financing?
Normally the angel investors are not allowed to take above then 30 percent of equity from the business they are investing in, according to the SEIS system. However, in that case, you would need to be incentivized entirely for the growth of your business. Most of the angel investors know this, and they do respect to such matters.
The angel investors also know that you will always need some extra capital to be used by your business in the future. Normally there are about 2 or 3 angel rounds before the business passes its growth and reaches boom.
At what stage should my business start looking to secure Angel investment?
The businesses in which angel investors normally invest their funds are the profit-generating, pre-profit, and pre-revenue type of businesses. In the case of pre-revenue businesses, all you would need to have is the proven concept. Your business should have high customer interest, and you should be able to prove that your products actually work. Other than this, you must demonstrate your business in a positive and efficient manner.
You need to take necessary steps to demonstrate that your company has a defensible position among all the competitors.
You can also use the copyright of your business to protect its image. Other than this, using a patentable idea is also a good option to raise the investments from angel investors.
More importantly, the companies who already have been generating their income and are at a stable position in the economy secure a better ratio of Angel investments. This is because investors find better chances of higher returns from such businesses.
The businesses that are on their pre-revenue phase are the riskiest ventures. They are in a position to show their proofs of concept or they simply have to work based on some protective ideas as something like the business ‘s intellectual property.
Some basic businesses in their pre-revenue phase, which are also searching for the angel investments are clean tech, MedTech and other tech science-related businesses.
The business that are at their idea stage basically has nothing to do with these angel investors as they have family and friends’ groups which provide the financing and investments to the businesses. If your businesses are at its idea stage, it’s better to look for finances from your friends and family.