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Finance
Angels of the crunch
Bill Morrow, co-founder of business angel network Angels Den, looks at whether the
angel funding network has fallen foul of the ‘credit crunch’ - and finds good news
Y
ou might be forgiven for assuming
that in the present economic
climate most investment from
business angels would have dried up.
However, despite the infamous credit crunch
persistently ringing in their ears, most business
angels are actually stepping up their investment
in the next ‘big thing’.
The so-called squeeze has had, if anything, a
positive effect by helping to define the ventures
that business angels want to put their money
into. Reduced incentives for investment in his-
torically ‘safe’ avenues (typically for small
returns in a booming entrepreneurial economy)
have persuaded angels to favour investment in
serious entrepreneurs with experience, con-
crete financials, enthusiasm and drive.
Buyer Beware!
Before all you budding entrepreneurs out
there throw caution to the winds and develop
‘that’ idea - the one that’s been eating away at
the back of your mind for months - be aware
that this increase in investment has focussed
angels’ minds on ensuring that key dynamics
are met before they invest.
If you are a serious entrepreneur it will come making money. They want you to give them Even Internet Matching is still perceived as
as no surprise to know you must have a great the ‘right’ answers! unseemly by far too many old school angels,
idea and a concise business plan - one that Services like Angels Den have filled in those who would much rather meet in fusty, cigar-
covers all the necessary areas from the current gaps, helping would-be entrepreneurs gain smoke filled board rooms, where the ‘lucky
and future markets and product specifics, along funding while providing the business angel few’ get to pitch. These people appear to think
with any IP, a USP and financials for at least a community with access to hundreds of the that Dragons’ Den is real and that an intimi-
three year period. best businesses in the making. dating environment is the best way to find out
This, combined with a committed attitude to Every day, over 700 angels log on to the what makes a pitcher tick.
your business, creates the best possible chance site, looking for deals to invest in.
This month’s message is clear
of securing investment. I may set off the Cliché Alarm by saying
It’s also a good idea to remember that it’s not this, but people buy from people. Grudgingly, If you are looking for funding, plenty is there
easy being an angel, especially considering the the angel community has been forced to look if you follow the (weird) rules. Don’t believe the
increasing number of entrepreneurs coming at different formats for meeting entrepreneurs. doom-mongerers - there is no crunch for
through the ranks. Savvy investors, on the It has taken us 14 months, but we are now those who already have the money. (Not many
whole, have a limited amount of time, and are funding more deals than all the rest combined. angels borrow to lend..!)
thus looking for a succinct and on-message We have had to drag some angels, kicking Angels, if you want to find businesses to
pitch. Any deviation can carry heavy penalties and screaming, towards innovations such as: invest in, move with the times - embrace new
for a would-be entrepreneur as the angel loses circle4 Video pitching, which allows you to dis- media and methods and meet some astound-
interest and moves on to the next potential play your passion to a wide community ing people. There are some truly amazing,
investment for consideration. circle4 SpeedPitching, which lets you meet as world-changing deals around at the moment
Remember, though, that angels are keen to many as 20 angels in one evening with just and all you have to do is log on.
invest. If they are not investing, they are not three minutes to sell your idea to them.
www.angelsden.co.uk
Business Matters issue 164 • 25
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