Business Angels

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Business Angels (BAs) invest their own capital into your business.  They are a certified investor.  BAs will want to be involved in your business so this option is not advisable for businesses who want complete autonomy. They would normally expect one of the following in return for their investment:

  • Part ownership of your organisation
  • Joint ownership of your organisation
  • Involvement on the board of directors: memorandum & articles / investment agreements/contract of employments
  • That you register as a Limited Company

Bear in mind that:

  • BAs take risks investing so need to know that you have a focused business and marketing plan
  • BAs receive hundreds of applications so make your business plan stands out to ensure it is read.  Out of 100 business applications received, you may realistically expect that 10 are considered and only 2 or 3 are chosen for investment.  Make your business unique and sell its unique factors otherwise BAs won’t be interested and won’t invest
  • Be creative with your marketing: create an interest in your business before you’ve even launched your business plan
  • BA’s are interested in small businesses that have a high potential for financial gain.  They will generally expect their capital back after 3 years or at least expect a review of their profit return.  They usually expect to visit you regularly for updates on your business. 

Useful website links

www.lincscot.co.uk

LINC Scotland acts as the national Business Angels network.  The website includes profiles of investors and business angels

http://www.scottish-enterprise.com/services/attract-investment

Lists co-investment funds available and explains the process