What is a Business Angel

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A business idea can only stay as an idea if you don't find the financing it needs to develop. Given the current situation, the public entities that can provide the capital necessary for a business to grow present more drawbacks and restrictions when granting it. The Business Angels They appear as an alternative solution, not only for the monetary field, but they are. as the name suggests, business angels. In this article, we tell you what is a business angel , how are the profiles of these business sharks and how can a company benefit it. 

Amazon was under the protection of a Business Angel

A Business Angel is more than a funding pool. They are people who, in their personal sphere, have gained experience and wisdom in the business. This is what they provide companies, especially entrepreneurs, in addition to the necessary capital to develop. 

They have gained wealth, they know how the business world works, and along with new entrepreneurs, they seek earn benefits simultaneously. 

What is the profile of these private investors like?

Although the characteristics of this type of investors are very diverse, there are many of them that coincide mainly in these people. For example, more than 95% are men from among 40 and 65 years. The gender is due to the low number of women holding management positions in large companies, and the age at which in that stage of life this investor has gained enough experience to help new entrepreneurs. 

Regarding studies, most only have one college degree. It is rare to find this investor with a doctoral or master's degree. 

And the main characteristic that largely determines this label is wealth. Any private investor who wants to be a angel must own the wealth enough for finance a business idea. 

Therefore, risk is not a factor to be taken into account, since it is the own investor the one who has the necessary knowledge to decide whether to invest or not. And that means that may know" if that business idea will ever have the expected success.

Types of Business Angels

There are many classifications of this type of investor, however we have chosen to explain the simplest:

  1. Active Angels: They are those who have already made investments before and are always searching new opportunities.
  2. Passive Angels: are those who have invested in business in the past but they have been retired for 3 or 4 years. 
  3. virgin angels: are the investors who they haven't done yet None, although they meet the requirements. 

For the entrepreneurial company, the important thing is to know what motivates these investors to be able to find a angel to help boost your business. This is what we tell you in the next section. 

What motivates a private investor to finance a new company?

There is two main motivations that lead these investors to trust a new business idea:

  1. Benefits: is the main reason that these angels. Generate benefits so much for him entrepreneur as for them is your goal. However, it is not the only thing that motivates them. It must be taken into account that the money with which they finance the entrepreneurial company is their own, so they assume a high risk. 
  2. Altruism: is the other great motivation. They are pleased when the entrepreneur not only achieves the objectives of seeing his company grow, but has achieved it with the help and advice of the angel. He feels obliged to pass on experiences, knowledge, mistakes you made in the past in your business, etc. Is a source of wisdom for the entrepreneur. 

At what point can an entrepreneur request the help of this investor?

From the time they are born until they are consolidated, companies go through some stages that define their status market maturity. Most of these private investors tend to want participate in business at early phases of the project. These are:

  • Seed stage: the entrepreneur has a idea or concept for a business that needs to be developed and tested.
  • Commissioning stage: the idea has been able to develop to the point where the preparation for commercialization.
  • early stage: It is the moment in which a specific product or service is produced and distributed. 

The investors prefer have a important and active role in the new company before going to the market, for this reason they tend to choose early stages of its development. represents a challenge to them, almost like a game involving their own money. 

Angels in Spain

Due to the economic crisis suffered by Spain since 2008, this profile of private investor has been strengthened. Companies, and the economy in general, have understood the important role that these investors play in the development of Spanish companies. 

There are numerous networks of these investors, which they tend to be governed by the territory. Usually the angels They invest in a business whose headquarters are near their residence. We leave you below a link in which you can find information about these networks and get the financing what do you need: https://www.business-angel.es/

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