Finance from Business Angels

Robert Sheffrin

Northwest Business Angels

5th December 2007

Angel Investors

Enterprise Investment Scheme statistics:Over 20,000 Business Angels in UKInvesting between £800m & £1bn annually

True figure much higher!

Business Angels?

Usually HNWI – gained from businessBring skills & experienceSome are serial investorsMost take an active involvementSome will syndicate

Angel investment…

Start up / early stage / pre-tradingBringing to market / establishedAll sectorsNWBA - up to £500k – typically £50k - £250kSome others - unlimitedPotential high return

Reasons why angels invest

Portfolio diversificationPotential higher return than stock marketBuilt companies before – want to do it againHobby / funHelp young entrepreneurs

Different investment styles

Retired – hobby investorPortfolio builderSerial investorCombination

Some things that they look for…Growth potentialManagement abilityPersonal commitmentHonestyMarketClear financialsWillingness to work with investorsFair valuationExit

Choosing an investor

Ask lots of questions – background, investments, why finds your business attractive?Personal chemistryEstablish trustDeal – fair to both sides

What makes a plan stand out?

I was expecting itTells me what I want to knowMeets fund / my criteriaSuccinct with evidenceBelievableMakes me want to meet you?

Tips to keep the deal moving

Provide information on timeDon’t over negotiateBe pragmaticUnderstand the investor’s positionUse adviser/lawyer who understandsDon’t neglect the business!

Angel delight……….

Enterprise Investment SchemeAnnual investment limit - £400kIncome tax reliefPotential tax free gainsTax relief for lossesIHT relief

Angels love it – apply for Inland Revenue approval

Northwest Business Angels provide..

Advice & assistance on investment processPrepare companies for investmentFunding summaryInvestor Club meetingsAccess to Business AngelsIntroductions to seed and venture funds

The Gateway to Angels

Northwest Business Angels

angels@nwda.co.uk

www.nwbusinessangels.co.uk

Tel. 01925 400 302