A business angel is a natural person who invests some of his or her funds, skills and time in the company being created. He or she takes a stake in the company and uses his or her professional network and skills to take part in entrepreneurial ventures. His/her objective is to stand out, which depends on the success of the company. But how do you call them into your project?
What project types are most suitable for investment by business angels?
Business angel funding is suitable for very small companies. These have big ambitions and aim to reach and exceed a turnover of €1 million in a short time. They have an international focus and intend to conduct ongoing funding to enable business angels to exit the business, make way for investment funds and reinvest in other companies. Business angels are not suitable for small, local, craft or commercial businesses. Today, most of them target the technology sector, especially the digital and biotechnology fields. Understandably, they tend to invest in the most promising areas.
When to contact a business angel?
First and foremost, you should know that you can contact a business angel for information. Starting a business and raising capital are two completely different things. Nowadays, we see more and more entrepreneurs lacking at the seed stage: they have a team and a project, but there is no turnover. A business angel makes a small seed investment, which will give the company a good start. The latter will then build its financing structure and if it works out, it will need a second round of financing. In this phase, other people can be brought in. As a business creator, you should plan to have one or two business angels represented to facilitate communication.
Range of support funds and preparation to be undertaken
At the seed stage, the first fundraising round can reach around 0-100 thousand euros. Then, if the company passes this stage and starts to have a turnover, the second round, which ranges from 100 to 500 thousand euros, can be considered. A particular process should then be undertaken with the business angel and the investment company. Once the initial investors advise on the project, they will invest together in a document. The groundwork has to be done right. Note that you can do it naturally on the day without having to recite your words.