01291 437 054

The following is an actual exchange between an early stage business owner and ourselves.  As such it is not totally Q&A, but does give a sense of what to expect of an Angel Investor in a more rounded context.

Angels invest time, experience and money but, since around 90% of start-ups fail. (21.5% in first year, 30% second year, 50% fifth year, and 70% in 10th year), are generally very risk averse.

  • They will look for proof of concept, market and financial projections, business experience, etc. a place on the board and (often) a real input into strategy and how things are run (but not day to day),
  • They will want some (form of) monthly payment for doing so.
  • As a ‘rule of thumb’ they will look to exit / realise their investment within 3 to 5 years, maybe sooner.
  • The stake you will have to give away will vary according to the weighting of all of the above, and more besides.

You need to provide:

  1. i) Evidence of actual and likely take-up ?

               ii)At what cost to (customer, intermediary, agency, etc.) ?

You should state:

  • Where and at what cost?
  • What revenue generated and how?

Depending on the size anticipated for the business (T/O, GP and NP), as above.

You will need to set out marketing information specifying:

  • Total size of market
    • %age of market you aim to take
    • How you will achieve this
    • How you will monitor this
  • Competitors and their prices
    • % age of market each competitor takes
    • ‘best guesses’ at their costs
  • Your unique selling points and why this beats your competitors

You need to include all of this in your figures and presentatioa

I hope at least some of this is of help to you. If you’d like to let us have the information listed above we’ll be happy to revie this further for you FOC.

At a high level, all “private equity” firms raise outside capital from Limited Partners (LPs) such as pension funds, endowments, sovereign wealth funds, and high-net-worth individuals. They then use that capital to acquire assets or companies, grow them over time, and eventually sell them to realize a return on investment.

However, the investment strategies used by these firms differ widely.

Some focus on large companies; some focus on smaller, high-growth firms; some focus on lending (i.e., investing in debt rather than equity); and still others focus on infrastructure or real estate assets rather than companies.

Read More