Angel Investors put money into start-up companies set up by entrepreneurs. It’s an attractive way to invest, but there are some risks.
Most investors put money into start-ups in the hope that they will make big returns. Early funders of Microsoft and Facebook and other big companies are now millionaires. This sounds attractive, but there are still risks considering.
There are several types of Angel Investors. Some successful entrepreneurs, for instance, want to invest in a Startup company also to provide advice and inspire other entrepreneurs. Other people simply want to help friends or relatives to pursue their passion. And some others are fascinated with learning about new technology.
The most common type of Angel Investors are family and friends who want to help an entrepreneur who has a great idea.
When it comes to when the money goes into to the company, there are also various types of Angel Investors. For instance, “Seed” investors put their money in at the very beginning, when the entrepreneur is starting up and needs funds simply to survive. Others put their money in at later stages, when the start-up is gaining traction or growing larger and potentially becoming profitable.
How to find a good investment?
There are a variety of ways that people who want to invest in start-ups can find out about them.
- Investment Events and Networking One way to find a good investment is to take part in events organised by associations or companies that liaise with angel investors. The UK Business Angels Association (UKBAA), for instance, has been promoting the angel investment community through workshops, research and networking for many years. You can join one of our events with USA Family Office. Our next event is in London 26th July 2018. You can check for other events as well by looking on Eventbrite to find events related to angel investing, for example, or check out talks at incubators that large companies have set up to support start-ups.
- Search Other Organizations USA Family Office UK is an organization that aims to link investors to start-up opportunities.
- Learn about Angel Investment You can also learn about angel investing through books or YouTube videos.
- Speak to Us For more personalised learning, our organisation Gateway2Entreprise provides courses and webinars that educate potential angel investors on topics such as portfolio strategy and evaluating start-ups.
- Seed Enterprise Investment Scheme (SEIS) – The Seed Enterprise Investment scheme offers great tax efficient benefits to investors in return for investment in small and early stage Startup businesses in the UK. SEIS was designed to boost economic growth in the UK by promoting new enterprise and entrepreneurship.
- The Enterprise Investment Scheme (EIS) is designed to help smaller, higher-risk companies raise finance by offering tax relief on new shares in those companies that qualify. For the investor, it’s a tax efficient way to invest in small companies. The EIS is aimed at the wealthier, sophisticated investors. People can invest up to £1,000,000 in any tax year and receive 30% tax relief. However, they are locked into the scheme for a minimum of three years. EIS seeks to encourage investment into unlisted companies.
For further information about SEIS and EIS please check one of our partners Family Financial Centre you can find them here http://www.gateway2enterprise.co.uk/partners/
If you are willing to become an angel investor, putting money into start-ups can offer good returns. However, before investing your money it’s best to learn about angel investing and figure out how to deal with the inevitable risks that come with new companies. If you need further information Gateway2Entreprise is an Investment Hub organisation that operates within SME sector. For further information please check our website www.gateway2entreprise.co.uk