Angels Den – FAQs and Resource Centre

Hopefully you’ll find here anything you need to know about funding. Everything from what equity funding is, to how much of your company to give away to investors, to what Angels Den is all about, plus lots of other interesting stuff.

However, if you read through the FAQs and start to get a little hot under the collar because we’ve not answered YOUR question, then email the question to us (
wings@angelsden.com), saying you couldn’t get an answer on our FAQ pages, and we’ll see if we can update it at some point.

  1. Will an Angel investor ask for a permanent stake in my business?


  2. How much equity will I need to give away?


  3. What’s the likelihood of anyone seeing my business if I register it on your site?


  4. Where can I go for funding and how do I go about it?


  5. What is the likelihood of my business finding funding with the help of Angels Den?


  6. How many business Angels do you have?


  7. What will it cost me to find funding through Angels Den?


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  9. Is there an option for our plan to be treated confidentially and accessed only by your registered Angels?


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  11. How do I become an Angel investor?


  12. When do Angels sign a non-disclosure agreement?


  13. How do I make use of Angels Den's services?


  14. Can I legally protect my intellectual property rights when using Angels Den?


  15. What is the maximum and minimum investment business Angels are willing to make?


  16. Do business Angels finance businesses outside the UK?


  17. Do business Angels invest in existing businesses looking to further develop and expand?


  18. What type of businesses do the business investors invest in?


  19. What is the typical timescale for a business to get funded through Angels Den?


  20. What are the advantages of using business Angels?


  21. What can I expect from Angel funding?


  22. What do Executive Summaries look like?


  23. What information are private investors looking for?


  24. What is equity finance?


  25. How can I prepare to pitch to an Angel investor?


  26. What should I wear to a pitch?


  27. How do I approach Angel investors?


  28. How do I write a summary of management?


  29. How do I raise funds for my business?


  30. What do business Angels expect?


  31. What makes Angels invest in start-up companies?


  32. As an Angel investor, what return should I expect from my investment?


  33. How has the credit crunch affected Angel investors?


  34. Why should I trust an Angel investor?


  35. How many investment opportunities are there on your website?


  36. How much activity is there on the Angels Den website?


  37. What is the Business Planning Process?


  38. What are Business Funding Solutions?


  39. What is a Business Venture?


  40. What is Capital Gains Tax Entrepreneurs’ Relief?


  41. What are Corporate Finance Companies?


  42. What is Equity Finance?


  43. How to find a business partner & Investment partnership?


  44. Are all business investors in business ideas the same?

  45. Are Private Investors for small business worth it?

  46. Are private investors suitable for my small business?

  47. Business Grants or Angel Investors?

  48. Do entrepreneurs need investors to fund business ideas?

  49. Where can I get funding for business ideas?

  50. How Can I Find Business Angels?

  51. How can I pitch to Investment Angels?

  52. How do I approach angel investors?

  53. How do I fund my small business ideas?

  54. How Do Venture Capitalists Differ From Angel Investors?

  55. How much can I get from small business investors?

  56. How Realistic Is Dragon's Den?

  57. How to invest in small businesses?

  58. How To Secure Business Investment From Angel Investors?

  59. I’m Looking For Small business investors - how do I contact them?

  60. Should I choose a business angel more for the money or for being a mentor?

  61. Should I look for small business investment?

  62. How can I meet UK business angels?

  63. What are Investment Angels looking for?

  64. Which Is The Best Angel Investment Network?

  65. What Sort Of Returns Do Business Angel Investors Look For?

 

  1. Will an Angel investor ask for a permanent stake in my business?
    Every deal is different, but it would be considered normal for an Angel investor to structure an agreement that will see a good return for them within three to five years. This would be achieved through the sale of the business, a large additional capital investment or the owners of the business buying back the investor’s stake.
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  2. How much equity will I need to give away?
    The percentage of equity that you will give away depends on just three things: how much your business is worth, how much investment you need, and what you negotiate with an Angel investor. If your business has been professionally valued at £500,000 and you are looking to borrow £50,000 then the negotiations are likely to centre on a figure of 10%.
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  3. What’s the likelihood of anyone seeing my business if I register it on your site?
    With over 4,000 business Angels registered on our site, we have Europe’s largest concentration of Angel investors keen to find funding opportunities like yours. We’re proud of the fact that 90% of our entrepreneurs who come to SpeedFunding find an Angel, which is – staggeringly – ten times the national average. Angels Den is regularly promoted in the national press, our founders regularly write a number of columns for business magazines and websites to widen the promotion of our website and increase the likelihood of your business being found by the right Angel.
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  4. Where can I go for funding and how do I go about it?
    With the recent decline in traditional sources of funding such as banks and venture capitalists, Angel funding has become the primary means for many businesses to find the funds they need to develop their businesses. Registering with Angels Den allows you to post a brief business summary on our website for our Angels to view. However, we have found that entrepreneurs have achieved the most success through our SpeedFunding events where 90% of all those who pitch one-to-one to our Angels have found the business partner they were looking for. For further information about how Angels Den works, come to our Why is Angels Den different? page.
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  5. What is the likelihood of my business finding funding with the help of Angels Den?
    Because we have the largest concentration of 
    business Angels anywhere in Europe at Angels Den, your business has a better chance of gaining funding here than through any of our competitors. Although it would be impossible to offer any form of guarantee, you can increase your chances of winning over our Angel investors if you talk to us at a free Business Funding Clinic, read our pre-pitching information and attend one of our Pitching School training sessions before pitching at our  SpeedFunding events.
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  6. How many business Angels do you have?
    Angels Den has grown at a fantastic rate to now have the highest concentration of
    business Angels in Europe. With over 4,000 Angel investors registered and more signing up every day, at Angels Den your business plan now has the best chance of being found by just the right investor to boost your business skywards.
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  7. What will it cost me to find funding through Angels Den?
    To register with Angels Den and place your “
    business plan” on our website for all of our Angels to see will cost you just £799 VAT.This includes a space on one of our SpeedFunding events (currently being held in London, Leeds, Scotland and Manchester) where you’ll also receive training on how to pitch to the Angels. At SpeedFunding, you’ll get to pitch your business face to face, one at a time to a room full of Angels. Should you wish to attend a second SpeedFunding event, it will cost £399 VAT. When you secure your funding there is a 5% success fee. We have so many entrepreneurs looking to pitch to our Angel investors that our fee structure has been created to separate out only the most serious contenders.
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  9. Is there an option for our plan to be treated confidentially and accessed only by your registered Angels?
    All of our Angels have signed our Non-Disclosure Agreement, which is vigilantly policed to ensure the confidentiality of the information that you place with us. Once you have uploaded your business plan our systems will add it to our regular “New Opportunities” email, which is sent to all 4,000 of our registered Angels. You do have the option not to be included in this email, although this is not recommended as it restricts your chances of finding the right Angel to fund your business.
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  11. How do I become an Angel investor?
    All UK residents must represent and warrant to us that they are either a “
    Certified High Net Worth Individual” or a “Self Certified Sophisticated Investor” as defined by the FSMA, an “Authorised Person” (someone recognised by the FSA as an investment professional) or an “Operator or Secretariat” for an investment club or network of business Angels.

    All non-UK residents must act in conformity with the laws of their country of residence pertaining to this subject.
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  12. When do Angels sign a non-disclosure agreement?
    All registering Angels sign our Terms and Conditions, which includes a non-disclosure agreement that extends to all of the information that entrepreneurs place on our site.
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  13. How do I make use of Angels Den's services?
    Registration on the Angels Den website is quick and simple, and will enable you to upload a very brief summary of your business or
    business idea. This summary is then sent out to our registered business Angels, who all have signed our Non-Disclosure Agreement to protect your intellectual property. On upgrading to full membership, your complete business plan can be uploaded to our site for Angels to view and you will then have the chance to present your business opportunity to Angels on a one-to-one basis at our SpeedFunding events. As a Microsoft BizSpark partner, we are also able to offer qualifying companies free Microsoft development tool software.
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  14. Can I legally protect my intellectual property rights when using Angels Den?
    Although all of our Angels sign our Non-Disclosure Agreement, you should seek to protect your intellectual property where possible either directly with the
    Intellectual Property Office or through a patent lawyer.
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  15. What is the maximum and minimum investment business Angels are willing to make?
    There really are no maximum or minimum restrictions to investments through Angels Den. The lowest investment we’ve ever had was for £6k, the highest by a single Angel was £1m and the average is around £220k.
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  16. Do business Angels finance businesses outside the UK?
    Angels Den has been set up under UK law; therefore even though our Angels are not restricted to only invest in UK ventures, you may find them more reluctant to invest in non-UK opportunities currently as there are fewer protections on foreign investments.
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  17. Do business Angels invest in existing businesses looking to further develop and expand?
    Absolutely – although in these circumstances Angels are most likely to be interested in an already successful business that is asking for a substantial investment to give it an additional boost or prepare it for sale or flotation.
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  18. What type of businesses do the business investors invest in?
    The quick answer is – absolutely any that they see potential in. We have everything from start-ups to successful businesses looking for investment, from every sector you could imagine. If you are looking for small business funding for any venture, no matter what stage your business is at, register with Angels Den today.
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  19. What is the typical timescale for a business to get funded through Angels Den?
    The average is 10 to 11 weeks, but timescales will be determined by the complexity of the legal agreements and the flexibility of the parties concerned. We offer a free Investment Agreement and legal documentation pack, prepared by our lawyers, and full instructions on how to close the round.
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  20. What are the advantages of using business Angels?
    The main advantage of using business Angels as opposed to more traditional methods of funding your business is that Angel funding is not secured on any of your personal assets.
    Business Angels are taking a huge risk with their own money, because if your business fails they will lose their investment but unlike those who offer secured loans they cannot come after you for more.
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  21. What can I expect from Angel funding?
    Angel funding is gloriously less structured than traditional means of raising capital. The relationship that you have with your Angel will depend on the individual wants and needs of each of you. Sometimes it will involve a simple transfer of money, while at others the Angel will require or offer a more hands-on approach. Many Angels recognise that their expertise and address book will fast-track your business to a more profitable success for all parties.
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  22. What do Executive Summaries look like?
    An
    Executive Summary is arguably the most important part of your business plan. As the first section that any investor will read, it will determine whether they are interested enough to read the rest of your document. It is not a boring index of sections, nor is it a hyped-up sales tool. The Executive Summary should be an honest representation of the main points from your business plan, offered in a form that will excite the reader’s interest.
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  23. What information are private investors looking for?
    This is a very individual thing, as it depends on the amount of involvement an Angel is willing to offer to a business and how much they believe in the potential of your opportunity. However, it would be fair to say that a clear and concise description of the business or concept, a full business plan including financial projections, the background of all those involved in the building and direction of the business, and a “reasonable” business valuation are all prerequisites of a successful pitch.
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  24. What is equity finance?
    In simple terms, 
    equity finance is when you seek finance from external investors in exchange for a percentage of your business. The two main providers of equity finance are venture capitalists, who invest from a fund of their client’s money, and business Angels, who invest their own money in businesses that they believe have true potential.
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  25. How can I prepare to pitch to an Angel investor?
    These could be the most important three minutes of your business life, so it’s essential that you prepare your pitch carefully. Our
    SpeedFunding events are busy affairs, with approximately 15 Angels sitting through 15 one-to-one three-minute pitches, one after another – so yours must stand out from the crowd. We offer two sessions to help you make the most of your time in front of each potential investor:
    •   The first is a half hour discussion at our free Business Funding Clinic
    .
    •   The second is our two-hour pitching training school which includes one to one coaching.

    To find out more about either of these,
    click here.
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  26. What should I wear to a pitch?
    This is not TV’s Dragon’s Den – you won’t be ushered out of our SpeedFunding event, tail between your legs, if you’re not wearing a suit and tie, but we’d suggest smart casual is best all round. It’s most important that you are comfortable and presentable, to give the best first impression.
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  27. How do I approach Angel investors?
    Registration on our website is the first step. But once you have uploaded your full business plan to Angels Den, you will have the opportunity to attend one of our SpeedFunding events where you can pitch your business directly to a number of business Angels in one evening.
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  28. How do I write a summary of management?
    Business Angels will want to see that your management team have the skills, experience and expertise to drive your business towards success within a defined timeframe. Any background working in a similar sector or experience of running your own business is relevant, as are the details of anyone who adds credibility to your business. Management weaknesses are a common reason for Angels to pass on an investment opportunity, so be thorough in your summary.
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  29. How do I raise funds for my business?
    Traditional sources of business funding have recently become increasingly scarce. They would include: asking
    friends and family, but everyone’s feeling the economic pinch at the moment so there’s little to spare; a bank loan, but it’s been well documented in the press how little of that has been going on despite millions of pounds of government investment; and venture capitalists, whose investment funds have been depleted as their clients have held back their funds until things start to look better. The fastest-growing small business funding market in the UK today is that of business Angels.
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  30. What do business Angels expect?
    Business Angels are primarily looking for a profitable return on their investment within three to five years. This is usually achieved through a management buy-out of their share in the business, or the sale of the business as a going concern. Other than that, each business Angel will have their own wants and needs from the relationship. Some will simply wish to invest their funds and act as a silent partner, whereas others will want a more hands-on involvement because they recognise that in this way they increase the chances of the business succeeding.
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  31. What makes Angels invest in start-up companies?
    Some Angels are successful business people who are looking to expand their portfolios, broaden their business risk or re-invest their profits. Others are retired self-made millionaires who are looking to keep their grey matter active. Still more are interested in helping start-ups and small businesses to succeed. There really is no single reason that motivates a business Angel, but the one thing that they all have in common is a desire to fund only those ventures that have the potential for great success. It is therefore essential that you present your opportunity in the best possible, realistic and honest light in your business plan and in your pitch at SpeedFunding events.
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  32. As an Angel investor, what return should I expect from my investment?
    Bearing in mind that no returns can be guaranteed, an angel could ideally expect to double their money over a period of around 2 years, or treble their money on a period of around 3-4 years. Another way of looking at this is to say that they can expect a cumulative return of approximately 50% for each year of the partnership. Of course the reality is often quite different, depending on the quality of your investment decisions and the assistance you are prepared to give a business to ensure its success.
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  33. How has the credit crunch affected Angel investors?
    The economic climate has been excellent news for Angel investors. Traditional business funding sources such as banks and venture capitalists have greatly cut back their investments, opening up a huge funding gap that is being filled by Angel investors. Small businesses are continuing to launch, although valuations are down, so Angels have found that they are able to achieve a higher shareholding in their new relationships.
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  34. Why should I trust an Angel investor?
    At Angels Den we have gone to great lengths to ensure that we comply with the
    FSA guidelines on the legitimacy of Angel investors who are registered with us. Also, all of our Angels sign a non-disclosure agreement when they register with us to protect your intellectual property.
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  35. How many investment opportunities are there on your website?
    With over 10,000 entrepreneursinventors and small businesses registered on Angels Den, business Angels have an excellent opportunity to meet some of the most inventive individuals offering the best business opportunities in Europe. At any one time sevral hundred will be actively pitching for funding.
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  36. How much activity is there on the Angels Den website?
    We may have more business Angels registered than any other website in Europe and over 9,000 entrepreneurs looking for small business funding, but we’re not resting on our laurels. With an average of over 100 business Angels and over 250 entrepreneurs and inventors registering on our site every month, we are growing very fast indeed. This of course gives everyone new daily opportunities to build successful, profitable business relationships.
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  37. What is the Business Planning Process?
    Producing a watertight business plan is very important, especially when Angel Investors will be scrutinising it! It is important to understand what a business plan should contain, ensure your information is accurate and your financials are realistic. It is very important to have someone, preferably someone impartial, to review the plan. At Angels Den, we have experts on hand at our free Business Funding Clinics who will do just that, and give you valuable advice and honest feedback.
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  38. What are Business Funding Solutions?
    Business Funding Solutions can take many different forms and it is important to secure the right funding for the right situation. Your company size will affect which business funding solution is right for you, for example what works for an SME won’t necessarily work for a big corporate company.
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  39. What is a Business Venture?
    A Business Venture can also be referred to as a Small Business, as both are start-up enterprises that begin with an idea and a small amount of capital. Most business ventures seek funding through one or more investors to develop and grow the business.
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  40. What is Capital Gains Tax Entrepreneurs’ Relief?
    If you own your business, are a partner, or own shares in a business, you may be entitled to tax reliefs that reduce your Capital Gains Tax bill. Capital Gains Tax is due when you sell, give away, exchange or otherwise dispose of business assets. Entrepreneurs' Relief allows individuals and some trustees to claim relief on qualifying gains made on the disposal of either all or part of a business, the assets of a business after it has stopped trading or shares in a company.
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  41. What are Corporate Finance Companies?
    Corporate Finance Companies provide financial advice to shareholders and companies and they advise on all aspects of monetary decisions that business enterprises make.
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  42. What is Equity Finance?
    Equity investors are prepared to put up risk capital in return for a share in a growth business.

    The big advantage of equity finance is that it never has to be repaid and there is no interest rate paid on the money. Equity investments are true risk capital as there is no guarantee of the investor getting their money back. The investment is not tied to any particular assets that can be redeemed from the business and, should the business fail, an equity investor is less likely to get their original investment back than other investors.
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  43. How to find a business partner & Investment partnership?
    Entering into a business partnership is a big commitment and it is worthwhile weighing up the pro’s and con’s before committing. Remember you will need to be able to make key decisions together, come to agreements quickly, and work together on a day-to-day basis. Think carefully about how it may affect your relationship and whether it is worth the risk.
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