Private Investing

Angel networks seek to introduce entrepreneurial businesses to angel investors who will buy shares to fund the company’s growth.

This keeps the balance sheet strong and improves credit ratings. Investors look to buy shares in growth businesses but do so knowing that this is one of the most risky types of investment – so investors’ expectations are high. They invest in good management, clearly defined products, services and concepts, validated market opportunities, and businesses with genuine prospects of a successful exit.

All investments are made for financial reasons. But there are also secondary motives; taking an active part in the entrepreneurial process, the enjoyment from being part of the success of a good investment and the sense of putting something back in.

There’s one big proviso for all angel investment: it’s risky. If you can’t afford to lose it, don’t risk it. If you’re a UK taxpayer, then tax breaks even on total losses can ease the pain a lot. Typical angel investments – from one person, but they may work in syndication – are from £20,000 to £200,000. Some angel networks offer smaller ‘entry-level’ deals, but these are only available to syndicates, to ensure the total investment is worthwhile and justifies the due diligence and legal preparation. Almost without exception, the investment is for equity, but in a few cases, convertible loans are possible: starting as an interest-yielding loan, and turning into a pre-determined equity share.

More Investing info...

What is an Angel network?

For example, there are around 25 registered business angel networks in the UK, responsible for over £50 million of investment in smaller unquoted companies.

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What are Business Angels?

Business Angels are private individuals who invest on their own or sometimes as part of a syndicate for larger amounts.

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What do I get as an Angel?

Connect East is a channel for deal flow, intelligence-sharing and greater connection between existing and potential private investors.

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Enterprise Investment Scheme

The following notes are for guidance only, and companies and investors should not proceed solely on the basis of the information here, and should consider seeking professional advice.

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EIS Guidance Notes