Prospective investors
Prospective 'business angel' investors:
What is a 'business angel'?
Someone who buys an equity stake (shares) in a private limited company, i.e. a company that does not have its shares listed on a stock market. The UK Government encourages 'angel' investment by giving tax breaks to qualifying investments under the Enterprise Investment Scheme. You must check this with your usual tax adviser, but in most cases this means 20% of the amount you invest will be given back to you through your annual tax bill, and after 3 years all capital gains will be completely tax-free.
Why might I want to be a 'business angel'?
It offers the prospect of a high return, and unlike a stock market investment there is scope (usually non-exec or part-time) to use your skills and experience to help the company's managers to raise the performance of the business and add value for all shareholders. Personal involvement is optional, but can be very satisfying and stimulating.
How much must I invest?
Unlike some wholly commercially-driven networks, Minerva does not put its angels under pressure to invest: the choice is yours. As a member of a syndicate or club you can refuse to invest at all, or invest (usually by buying one or more units of £5,000, £10,000 or £25,000 in your chosen companies) up to whatever limit you decide. If instead you prefer to invest on your own we will work with you to create a funding package using (as appropriate) banks, venture capital funds and other funding sources so that the effect of your investment is multiplied (leveraged). Please visit our Case Studies page to see how that has worked.
How can I find investment opportunities?
The world is full of them: lots of people would like to find someone to back their latest hare brained scheme. But the sensible route is to use trusted sources that will do some preliminary vetting before putting you in touch. These might include your banker, lawyer or accountant - and you might wish to join a pro-active, long established, professionally managed network such as Minerva, which observes the Code of Conduct of the British Business Angels Association.
Do Minerva angels only see high tech companies and research projects?
No. Minerva focuses on companies with competitive advantages that can produce high growth. Some will be in traditional industries, others will be in newly emerging sectors. Sometimes there are Management Buy-outs and occasionally a company for sale will provide an MBI opportunity. Some may be at seed stage, perhaps coming out of a leading university, but none will be non-commercial research projects.
Is it very high risk?
Investing in unquoted companies is inherently more risky than investing in shares traded on public markets, and advice should always be taken from a suitably qualified independent adviser before making any commitment. Although it brings real opportunities to achieve high returns, 'business angel' investment should only be one element in a balanced portfolio of investments.
Much risk can be removed by using common sense: do not invest in businesses or business sectors that you do not understand, refuse to be rushed into making a decision before you have had time to assess the business as thoroughly as you need, and walk away if you have doubts about the personal chemistry between you and the existing shareholders. Also, have your lawyer draw up a Shareholders Agreement and get it signed before you invest.
How long to my first investment?
That partly depends on you. Although you can do a certain amount of appraisal by desk research, you need to go and see the businesses in operation. Business owners are bad at describing themselves and their businesses, so you will invariably find that the real thing is very much more interesting than the paper version - and when you have taken the trouble to turn up on site they will often open up with commercially sensitive information that they would not put into the public domain. So, the more miles you do the better informed you will be, and the faster your rate of progress.
I am not the 'Dragon's Den' type. Is this for me?
BBC TV's 'Dragon's Den' is all about making good TV. In real life there are 'angels' and entrepreneurs of all types and, unlike the BBC's 'angels', Minerva 'angels' are not forced to waste time making detailed assessments of proposals that are in sectors, and are run by people, that - to them - are fundamentally unappealing. So, join Minerva (it's free), learn how to be a business angel and join in when you're ready.
Do Minerva's business angels all live near your HQ?
No. Most of Minerva's business angels live in other parts of the UK and invest in high potential businesses regardless of location. Others live in Birmingham, the Black Country, Coventry, Herefordshire, Shropshire, Staffordshire, Warwickshire, Wolverhampton or Worcestershire and might prefer to invest in locally-based businesses.