Business looking for funding
Make sure you choose
|For the business person or entrepreneur,
a business angel network presents a mix of opportunities, concerns and
emotions. You will know that although investors are the majority of members of networks,
it is the fees and commissions from businesses looking for funding that is
their main income. You probably also know that only about 1 in 3 business
promotions put through any of the angel networks receive funding by this
Many networks screen the proposals and select a very small percentage of those put forward to present to members. In some cases its as few as 5% of the proposals that eventually make it, to appear to members. We like to have a mix of business types, and aim to match different groups of members to opportunities that is in line with their interests. Many others use the same criteria as venture capital companies, and are looking for very rapid growth and an exit by floatation. Lifestyle companies, the normal businesses that provide services, retail and similar, are rarely suitable for this, even if the directors had the desire.
We however are the exception and do like lifestyle businesses, and assist a far higher percentage to be able to create proposals that are able to be presented to members. We also help develop and feature franchise opportunities, another route to growth that some businesses like to consider.
Many business angels join the board, or become participants bringing a wealth of experience.
|Having said this, it is estimated in a
government publication that annually between 3,000 and 6,000 small
businesses in the UK receive funding from friends, relatives, acquaintances
and business angels amounting to between £500m and £1 billion. In another
section of the same report it reports that £12.8 billion was invested in
small businesses in the UK between 1999 and 2000 by the same groups. In
addition many of these business angels join the boards, or become
participants bringing a wealth of experience. Although there is no
explanation for why this second figure is much larger, it probably also
includes other funding from venture capital firms and merchant banks to
medium sized businesses growing ahead of going public.
It is doubtful if anyone really knows the accurate size of this, but it is both large and greatly under funded. If more small businesses could be funded it would be beneficial for all, and this is now recognised by government.
Small and medium sized businesses are, and have always been difficult to fund, with high street banks mostly only interested in lending based on the surety of the equity in the directors homes, and both merchant banks and venture capital businesses not being interested in smaller businesses or lifestyle businesses. The only ones they are usually excited about are high tech companies that can grow very rapidly and be floated on the stock exchange.
Many venture capitalists expect 4 out of 5 to fail, or just to be wound up through poor performance and therefore expect to make enough on the 1 in 5 to succeed to recover all their losses with profit.
A business angel
Don't think of business angels as men in suits. They each have individual interests, likes and dislikes. The angel network is more like a dating agency than the stock market.
|So why approach us
Well, we have a foot in both camps, our MD has international experience of merchant banking and funding businesses going back over 30 years, while we also have a very close working relationship with Business Club International, the club for everyone interested in business.
We also have 4 classes of members, Ordinary, Gold and Platinum plus the venture capital companies who have Diamond membership. Our Gold members are the equivalent of most commercial business angel networks, while our platinum members are perhaps more those who take on mentoring and venture capital type roles as a main professional interest. Besides this we have Ordinary members, most of these are people in or with an interest in business. So ideal for the lifestyle businesses that perhaps have a lower risk, and lower return with a longer term involvement, as well as franchises. Many of our Gold members will have come from the ordinary membership and will also have an interest in this area as well. With a number of companies we have set up to run simulations and to allow people to get experience of becoming a director or business angel, we are empowering more people to become business angels.
If your proposal is more suitable for presentation to venture capital companies than business angels then we have these as our Diamond members, but also some of our platinum and gold members may be interested as well.
We also encourage you to consider other ways of achieving your goals, or some of them, including franchising, licensing, joint ventures, commissioning, and more. We can also help you to expand your management team, find assistance and improve the future for you and your business.
We are a non profit company, part of an international family of clubs, businesses, and organisations, dedicated to improving the quality of peoples lives. Our own establishment costs was covered by a grant from this group, and we receive considerable subsidies from Business Club International (BCI). In return, if you are, or become, a member of BCI, then the charges we make to you, will be far smaller. It is part of the deal we have with them, but we also know with the help you get from them, the business plan and proposal that you put forward will be far sounder and that you will have had a chance to have practiced presenting it to other BCI members, so your chance of success should be far higher. We also offer another alternative way to get these skills within ABAN, with the ABAN Plus Club.
We are completely up front about the cost, its not cheap, we are about the same as others, unless you are a BCI member of course, when you get large discounts, as do some of our ABAN PLUS Club members. Some other clubs such of the Camera Images Club also have special arrangements for a specific industry in this case photographic related businesses. Click here to get to the costs. Our Platinum members also get a discount. Please notice that we have split the cost into stages, this means that putting forward your first proposal and getting feedback is economic. Similarly having some items optional allows you to decide if this is for you or not, often these presentations are not necessary for lifestyle projects where wider general coverage perhaps, and waiting a little longer, is better.
We can't promise you success, and don't believe in spin and giving people false hopes, but we are never unpleasant or rude to anyone. So if we don't like what you have to propose we will tell you, and give you the opportunity to go away and have another think. We will also often see problems or risks that people have overlooked, and understanding business, business people and investors, we can often give you useful feedback.
We want you to be a member of our angel network, it can be at any level and most as you will know are free. It is just that it is you as a member, who is putting forward a proposal, not some group of faceless suits. You can do this at the same time as telling us you are interested in using the angel network, so it will not slow anything down.
You don't have to become a member of the ABAN PLUS Club, but for many it will make a great deal of sense. It means that you get the chance to meet with other members more, as well as make use of the ABAN PLUS events and meetings. You can take part in Experion projects, where you can show others your abilities, and get to see who you like dealing with, and also get the chance in a friendly environment to look at opportunities to see how, as an investor, you would consider projects and the questions you would ask, as well as practicing presenting your ideas to other members, who are there, like you, to gain experience and assist each other. You can also discuss the franchise route, either to see what is available or to look at how you might also become a franchisor, offering franchises to others. Some member types are also packaged to reduce the costs of putting forward projects that require funding, so well worth considering.
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