Magazine article Management Today

Crash Course in ... Becoming a Business Angel

Magazine article Management Today

Crash Course in ... Becoming a Business Angel

Article excerpt

Your own career has been pretty successful, you've accumulated a decent amount of capital and now the idea of investing in start-up businesses appeals. But have you got what it takes to be an angel?

Show us the money. You'll need at least pounds 50,000 to pounds 100,000 to spread over up to a dozen investments, says Chris Allner, who chairs investment for Octopus Ventures and its network of private investors But, orphans and widows, take note: 'You may not get it back, so it should represent only 5% or 10% of your total assets,' he adds.

What are you looking for? Most angels are looking for more than just financial investment. 'It's a great way to get involved in young businesses and pass on your knowledge and experience,' says Tracy Light, head of marketing at network Angel's Den. 'A lot of our members want to give something back to the business community.'

Steel your nerves. A Nesta study in 2009 found that 56% of angel investments ended in failure. 'At times you'll think the business won't survive and at others you'll be elated by it winning a big contract. It's definitely not for the fainthearted,' says Allner.

Join the club. The best way to get exposure to investment deals is through a club or network. Some heavily vet potential investments, others such as Angel's Den offer something akin to an introduction service. In most cases, you'll have access to investment expertise, professional services and the opportunity to pool investments with others. 'Investing alongside others enables you to share due diligence and corporate governance,' adds entrepreneur and business angel Gary Dixon. …

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