Business Angels

5. A Personal Deal

Investments by business angels are comparatively informal and rely on a greater degree of personal chemistry and trust than other forms of financing. But you will still need to negotiate the legal aspects

5.1 Look for a business angel whose priorities match your needs.

• If you only want investment, look for an angel who is looking for financial gain first and is happy to be a passive investor.
• If you need help, look for an angel with the time and skills that you need. For example, management experience, technical expertise, or contacts.

5.2 Decide whether the business angel is someone you could work with by trying to obtain answers to the following questions:

• What motivates the business angel? What is the angel looking for?
• What skills does the angel have to offer?
• What appeals most about your business?
• What causes the most concern?
• What key weaknesses does the angel identify?
• Which aspects of the business does the angel find exciting?

5.3 Check the business angel's credentials.

This is particularly important if the angel is using the investment to buy a job.

• Ask for a copy of the angel's CV. Look for evidence of previous success.
• Confirm the angel's track record by contacting previous employers and companies the angel has invested in.Telephone or visit them. (If you ask for this information in writing, you are likely to get a guarded response.)
• Try out the business angel. You can get a better idea of an angel's skills by asking what the angel would do about a particular problem.