You Don't Need To Invest Millions To Help Get An Innovative Business Off The Ground

Make an entrepreneur's day (and possibly her fortune)

There are an estimated 150 million businesses currently in the making worldwide, with about 300 million people involved in making them. On average, about two thirds won't even make it to launch, which still leaves about 137,000 successful launches, per day, this year. Many, or even most, of them will fail, but a certain few will become the Airbnbs and Ubers (and Home Depots) of tomorrow. These startups will fundamentally change their sectors and make fortunes for the angel investors who provided valuable assistance to them during the key early stages.1

The business world loves entrepreneurial startups because it's where the inventive and pulse-quickening action is happening. And angel investors seem to love them especially, investing more than €7.5 billion in Europe annually, a number that's still rising. That's more than what is currently being allocated by venture capitalists, suggesting that the importance of business angels to the equity capital industry is nothing to scoff at. What's more, angel syndicates (a group of angel investors where typically one angel takes a lead role) are growing in number and size, perhaps indicating further the strength of angel investment in today's business scene.

Could I be a business angel?

Business angels—let's call them BAs—are private individuals who directly invest part of their personal assets into young, unquoted businesses. They are usually of high net worth and experienced in business, and generally invest smaller amounts than what a venture capitalist would, ranging from as little as €10,000 up to €500,000+. BAs invest at an earlier stage than venture capitalists, and in doing so are often able to forge a relationship with the entrepreneur whereby they provide business management advice and a list of contacts to help the startup head in the right direction. The capital they provide, therefore, is smarter and more patient. What's attractive about being a BA is that you can be more involved in bettering the project's chance for success, which gives you some measure of control over your investment's fate and allows you an additional emotional payoff if and when the project takes off.

Tell me more about these angel syndicates

A best-practice example of an angel syndicate is the Rising Tide Europe 1 programme (RTE1), which consists of 90 successful businesswomen (representing 23 countries). They have combined their...