Entrepreneurs and Business Angel funding
There are essentially two categories of capital available: venture capital and bank loans or secured loans. The bigger the risks involved, the lower the willingness of suppliers of debt equity will be. For start-ups and early-stage companies these risks are relatively high. These companies have limited possibilities for securing a loan with assets. Business angels provide risk capital to these companies. Besides venture capital they give access to their expertise and contacts giving the company an extra boost for growth. Generally speaking arranging capital from a bank is to be preferred. If additional funding is still needed this can be complemented with risk capital. Experience shows that Business angels invest up to € 1 million. Minimal investments are around € 50k and amounts between € 100k en € 400k are most seen.
Is Business angel funding fit for you?
Does the following desription matches your profile? Then Business angel funding could be an option for your company
- You can’t get funding from banks or only partially;
- Your company will realize actual social responsible added value resulting in a good return;
- A business plan is available and/or a clear summary;
- You are prepared to hand over a (minority) share in the company to third parties. You are aware that the Business angel wants to be involved in your business and wants to assist you with knowledge and network;
- You are seeking for funding in the range of € 50k to € 1 million;
- The current shareholders do agree to attract a Business angel. Venture capital is generally provided through a subordinated loan and an equity stake in the company.