Finance from Business Angels Robert Sheffrin Northwest Business Angels 5 th December 2007

Angel Investors Enterprise Investment Scheme statistics:  Over 20,000 Business Angels in UK  Investing between £800m & £1bn annually True figure much higher!

Business Angels?  Usually HNWI – gained from business  Bring skills & experience  Some are serial investors  Most take an active involvement  Some will syndicate

Angel investment…  Start up / early stage / pre-trading  Bringing to market / established  All sectors  NWBA - up to £500k – typically £50k - £250k  Some others - unlimited  Potential high return

Reasons why angels invest  Portfolio diversification  Potential higher return than stock market  Built companies before – want to do it again  Hobby / fun  Help young entrepreneurs

Different investment styles  Retired – hobby investor  Portfolio builder  Serial investor  Combination

Some things that they look for…  Growth potential  Management ability  Personal commitment  Honesty  Market  Clear financials  Willingness to work with investors  Fair valuation  Exit

Choosing an investor  Ask lots of questions – background, investments, why finds your business attractive?  Personal chemistry  Establish trust  Deal – fair to both sides

What makes a plan stand out?  I was expecting it  Tells me what I want to know  Meets fund / my criteria  Succinct with evidence  Believable  Makes me want to meet you?

Tips to keep the deal moving  Provide information on time  Don’t over negotiate  Be pragmatic  Understand the investor’s position  Use adviser/lawyer who understands  Don’t neglect the business!

Angel delight………. Enterprise Investment Scheme  Annual investment limit - £400k  Income tax relief  Potential tax free gains  Tax relief for losses  IHT relief Angels love it – apply for Inland Revenue approval

Northwest Business Angels provide..  Advice & assistance on investment process  Prepare companies for investment  Funding summary  Investor Club meetings  Access to Business Angels  Introductions to seed and venture funds

The Gateway to Angels Northwest Business Angels Tel