Angel investing is undertaken by individuals, or groups of individuals (acting as a syndicate or network), who invest their own money in return for shares (equity) in the business.
Angel investors usually want to meet business owners face to face and hear them pitch their business before making a decision. In addition to funding, angels will also provide expertise, experience and access to their networks to support the business and maximise the chances of success, even taking a role on the board.
Individual business angels will usually invest anything from £5,000 to £150,000 in a single business. Syndicates of angel investors may provide larger amounts of funding.
Angel investment can be used by early-stage businesses operating across most business sectors, typically with a turnover of up to £5m. It’s especially suitable for companies with a scalable business proposition that are seeking investment to help them grow, develop existing and new products, build teams, invest in marketing, enter new markets and access working capital.
Angel 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. Some angels specialise in specific sectors they have expertise in.
More information is available from the UK Business Angels Association which is the national trade association for angel and early-stage investment.