The big problem with business angels is that they are hard to find. They tend to guard their identity so that they are not inundated with applications from companies.
Start with all of your family and friends – you may find an investor from your own personal contacts. Draw up a list of business contacts including bankers, accountants, lawyers or other advisers who might have access to potential investors.
Occasionally, advertisements or cold calling known business angels can work. Remember to also target potential investors from the industry you are in. When setting up Pride Valley Foods, a speciality breads manufacturer, Hossain Rezaei knew that he needed someone with experience of running an international food company. He went to great lengths to attract Roger McKechnie, founder of the Phileas Fogg range of snacks, to help his company – particularly as it was based in the North East of England.
Make use of any networking opportunities that you can. Roger Keenan had the backing of a business angel when venture capitalists would not invest in his company, Eyretel. Keenan has now channelled £100,000 into a new technology firm, Amacis, after meeting Tom Montgomery at a seminar. Montgomery had been working for another company at the time but pursued Keenan after leaving and setting up his own company over one year later.
There are many angel networks across the country. These tend to operate within a relatively small area. For example, this could be specific to certain cities or cover the whole of Scotland.
Networks operate as a introduction agency matching businesses looking for finance with potential investors. They will be able to tell you what the general requirements of a business angel are, for example, putting together the business plan. If your business fits the criteria for investment, you may get the opportunity to present your case at an investor forum, where business angels are invited to listen to the presentations of a number of companies. Even if you get to this stage, there is no guarantee of success.
In addition, there is also the British Business Angel Association (BBAA) which has evolved from the National Business Angel Network, which was launched in 1999 to match investors and companies across the country.