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Business angels – can they help you?

A “business angel” is a private individual who invests capital and knowledge in unlisted companies. The goal of a “business angel” is to develop the company to make it interesting for private equity firms and other buyers. “Business angels” often avoid to advertise their existence. They might otherwise be overwhelmed by requests. Therefore contact is often made through various types of personal or formal networks.

How do you find an “angel investor” and how do you have to prepare yourself?

• Be prepared well in advance if you anticipate a situation with increased need for capital in the business. There is no good position to negotiate with a “business angel” when the liquidity crisis is a fact.

• Ways to find angel investors are participating in network activities, contacting various Capital Association, your banker or accountant.

• The business plan is an important document for a risk financier to assess your business. Adjust it so that the reader can assess the potential risks and the possibility of a good business at a risk financing company.

• Highlight and describe the people who work in and around the company. “Business angels” are much more focused on you as an entrepreneur and your environment than any bank.

• Before you make contact, you should investigate what kind of business the “business angel” is specialized in – his/her preferences of industry, geographic location and size, but also which phase in the company's life cycle the financier prefers to invest in.

• Remember that it's you that offers a “business angel” a business opportunity. It's you who run a company that can grow and thus have the upper hand for the negotiations.

• Conduct a self-assessment of the company, so that you get an idea of ​​what demands are reasonable when the negotiations begin.

About the author

Stefan Ekberg has worked in marketing for small business for 20 years and has written around 30 books on how small business owners can market themselves with limited resources. . In 2012 Stefan was nominated as Entrepreneur of the Year in Stockholm.

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