Why UK Small Businesses Should Call on Angel Investors
Angel investors, sometimes referred to as private investors, invest their own capital and usually come at the start of the business. Amazon and Apple are prime examples of companies which got their early-stage finance from angel investors.
In the post, we share compelling reasons why your UK business should strongly consider raising equity finance from angel investors.
Equity Finance as Against Debt
One of the greatest advantages of raising start-up funding from angel investors is that it is far less risky than borrowing. Why? Because the investment capital does not need to be repaid, unlike loans, even if the company fails.
Angel investors offer equity rather than debt financing, so they don’t charge repayments or interest costs to the company, and they don’t need collateral. This means that if something were to go wrong within the business, you won’t end in masses of debt.
Experience and Expertise
Not only do private investors provide money, but they can also use their experience and knowledge to help your business succeed.
Expertise is a big advantage of partnering with angel investors. They will not only provide you with funding, but they will help you to find the right people, put the necessary structures in place, and take care of critical things such as patents, production, securing business premises and insurance to protect your business and workers.
In this situation, angel investors can provide the necessary knowledge and resources to make the process run more efficiently and empower the founders to focus on the growth of the business.
Angel investment groups also sometimes organise events or competitions that provide additional networking opportunities for new entrepreneurs which is of great help as networking is very helpful for entrepreneurs.
Business angels are becoming increasingly important when it comes to funding new businesses by offering small capital and resources to enterprises that cannot be funded by the current industry.
An angel investor can quickly make an investment decision without going through complex processes and departmental procedures. They do not operate as part of a larger unit of business, such as private equity or venture capital funds, as a result, they can often make faster decisions.
Angel investors have helped to build several well-known businesses, including Google, Yahoo and Alibaba.
The percentage of equity angel Investors would want depends on the amount of investment needed and the company’s level of development. Before taking any private investor’s money, you should sit down with the investor to discuss why you need the capital, how the money will be used, and your development plans.
The UK is fortunate to have an increasingly dynamic and thriving angel investment scene. There are a number of angel investment firms on the market that make starting a business easier for entrepreneurs.
You will need the professional knowledge and experience of these investors when making key decisions in your business. They can effectively use their previous knowledge of working in a small business or running their own business facilities to help take your business to where it should be.