How are different early stage investors classified?
What are the two wings of a business angel?
money
can add value
What are the typical characteristics of a business angel?
80% have top management experience
75% have already founded their own company and have an average experience of 31 years
50% have more than 40 years of experience as investors
30% are between 35 and 44 years old
10% are worth moren than €25 million in assets
Why is there a lack of transparency when it comes to angel investments?
Reasons for the lack of transparency are little disclosure obligations for transaction of non-listed firms and the lack of an institutionalized infrastructure and an fragmanted market
Difference between the angel investor market in the US and Europe
3 reasons why angel investment is critical …
Decreasing supply in the early stage investment market
VC funding in the seed and early stage market has slowed down
VCs are increasingly moving into bigger deals in more developed companies
Increasing demand from start-ups for finance
Rise of entrepreneurship activity
Focus of new ventures on the digital and internet space with smaller capital requirements - angel investment becomes suitable
Public money is playing a role
Goverment has recognized the importance of angel investment for economic growth by introducing the SEIS (Seed Enterprise Investment Scheme) and extending the EIS (Enterprise Investment Scheme)
Different types of Business Angels
Characteristics of a selective caretaker
High time spend per investment and low number of investments in current portfolio
Serial entrepreneurs or highly experienced former managers
Very low failure expectation
Characteristics of a part time angel
Low time spend per investment and low number of investments in current portfolio
New inexperienced investors or non-leas “expert investors”
Often still with full-time employment
Very young but also moxed investment portfolio
Characteristics of a portfolio investor
Low time spend per investment and high number of investments in current portfolio
Usually investors who encountered good financal windfall
Usally internet investors with non-lead participations
Very young investment portfolio
—>much closer to a VC
Characteristics of a full time angel
High time spend per investment and high number of investments in current portfolio
Long experience as angel or VC investor
Often with back office and fund structure
Diversified portfolio of young and old investments
How can an angel help besides funding?
Experience
Network
How do business angels make their decisions?
The solution: Look for products consumer want - many people are in the market for solution
The moment - Look for early investments opportunity - business angels are interested in investing in the seed stage, potentially just and idea
The team: Invest in the people, not just the idea - ask people who know the founder, get them social-proved
Why is the team so important for a business angel?
Most business angels get involved for the fun, followed by the desire to support young entrepreneurs
Usally, they do not invest more than a quarter of their assets
What should you do to convince an investor?
To Test your idea for market viability
How do you find an angel investor?
Participate in angel groups
Partner with winning angels
Focus on the top 5 members of your network
Find 2-3 angels with a stromg network
Build a network in one or two industries
Set-up personal meeting with key people
Different types of sources to look for a business angel
Informal sources
business acquaintances
founder
Formal sources
VC companies
Banks
Investment consultants etc.
Organized sources
Universities
Matching services
Business brokers
Newspapers
What influences ehich type of business angel a start up needs?
The decision for a specific type of investor depends on your business model
Last changed8 months ago