Is your business best suited to a Business Angel or an Investor? The answer of this question is largely dependent on the nature and position of your business. Here are a few things to consider:
Management Team
The experience of the management team is one of the big determinants on which way you should go. Angels are ideal if you believe the business needs more experience than what you and your current team can offer. On the other hand, if you and your team are experienced in developing and managing a business then an investor is probably more what you’re after.
Completeness of the Matter
An investor will seek an investment in a business that has everything accounted for. Resources are in place and agreements ready to be executed. Angels are more open to matters that still have a few bridges to cross before reaching its potential.
Industry Contacts
Would access to industry contacts help the business achieve its goals? Many Business Angels like to stick to industries that they are familiar with. They generally have contacts or intimate industry knowledge that can really give the business an extra boost.
Business Requirements
What resources does the business really need? Is it straight cold hard cash for investment into technology and other equipment, or is there a portion of the required funds that are allocated to investing in expertise. If so, this could lend itself to a Business Angel. The deal may be structured in a part cash and part sweat equity. Sweat equity is a term for an arrangement where a person dedicates time and expertise in the business in return for equity.
Whichever way you decide to go it is vitally important that you present the business proposition to the potential investor in a professional and well thought out manner.
Please feel free to give us a call if you would like to have a talk about your matter and which funding option might be best for you.