Definition

Business Angels are individuals who invest part of their capital in an innovative company with strong potential and who, in addition to their money, freely provide to the entrepreneur, their competencies, experience, business acquaintances and part of their time.

 

 

 

« individuals » :

Every Business Angel has a specific profile but most of the investors can be described by one of the 3 following main profiles :

• the previous Company Manager or Senior Executive with some capital and who can invest between 5 k and 200 k € per year, 
• the entrepreneur, who has previously created his /her own business, has sold it a few years later and can invest between 50 k and 500 k €. This type of Business Angels is limited but keeps increasing. 
• a « family office » member (groups of investors who are members of the same family).

« part of their capital » :

Investing in an innovative company in expansion is generally highly risky: this risk goes hand in hand with a very important potential capital gain!

« innovative company with strong potential » :

« Innovative » must be understood as « what is knew compared with what already exists ». Thus, it does not only refer to technological innovations. Moreover, companies in the domain of technological innovation add up to only 5% of business start-up as a whole. Most of Business Angels invest in other domains than technology.

« their competencies » :

In most cases, Business Angels are older than entrepreneurs. Thus, they can provide them with competencies they have acquired throughout their career. Business Angels competencies are thus multiplied if they get together to invest in a project.

« their experience » :

Business Angels are usually previous Executives and thus provide their technical expertise to entrepreneurs. They allow them to put things into perspective and to manage short term situations. If the Business Angel used to be an entrepreneur, his/her experience is thus twofold.

« their relational networks » :

Every one has a business network which can bring reputation and credibility to the project. These diverse networks can open doors, either financial or relational or even political ones. Good contacts make it easier to negotiate, notably with venture capitalists.

« stheir time » :

Business Angels can spend time with the entrepreneurs who wish to and give advice, but will not take part directly in the business management.