Business angels (private investors)
A business angels is an individual who invests in your company from a business perspective. Ususally they are or have been an entrepreneur. Business angels also bring knowledge, experience and a network to the table. Find out on this page what business angels can do for your business.
What is a business angel?
A business angel is someone who invests their own money in businesses. Such a person is also known as a private investor. Business angels mainly invest in start-ups and innovative businesses. Because growth is not guaranteed, this is also referred to as ‘venture capital’, or 'risk capital'.An investor buys shares or provides a loan
A business angel generally invests in pre-start-ups, start-ups, and entrepreneurs in their early growth phases. Investments usually range between €50,000 and €750,000 in the form of a loan or in exchange for ownership equity. Business angels operate as individuals, in networks or in funds.
Repaying your business angel
A business angel wants to recoup their investment with a profit. If an investor buys shares, they will want to be bought out after a few years at the market value at that time. If you take out a loan, you will pay interest and make repayments in accordance with the agreed terms.
Why choose a business angel?
Private investors are particularly attractive because::
- Flexibility:The terms of the investment are often more flexible than those offered by a bank. Consider, for example, the repayment schedule or the distribution of shares.
- Speed: The process of obtaining financing from a business angel is usually faster than with a bank or a larger investment company.
Business angels are particularly interested in businesses with a novel idea or those that are growing rapidly. Do you want to expand your business or, for example, launch a new product? If so, a business angel could be a good option for you.
Choose a business angel with suitable knowledge, experience, and network
In addition to money, a business angel also contributes knowledge and experience, and their personal network.Does a business angel invest in your business in exchange for shares? Then he business angel then becomes a co-owner and gains a say in decision-making. Especially in the early stages business angels are often closely involved in the day-to-day running of the business. So, it is important that the business angel’s experience and network are a good fit for you.
Where can I find a business angel?
Many business angels are members of networks. Through these networks, you can find out how they operate and what they expect from entrepreneurs. This allows you to find an investor who is the best fit for your business and sector.
Many business angels are affiliated with the association of Business Angels Netwerken Nederland (in Dutch). And you can find a list of potential investors in the TechLeap.nl Finder.
More information about finding investors can be found at kvk.nl. Watch this video for an overview of ways to finance your business, including private investors.
Guide to working with a business angel
Sometimes you can send a pitch or a brief company profile to business angel networks. The network then decides whether to forward your proposal to investors. This helps you get in touch with the right people more quickly. But how do you create a good pitch? What should you look out for in the first meeting? What should you include in the letter of intent? The Guide to working with a business angel from KVK can help you with this.
Increase your chances with the help of a financial advisor
Business angels want to see a clear funding application. You can draw this up yourself, but seeking help from a professional advisor often improves your chances.
A financial advisor knows what to look out for and what information is required. They can also advise you on share agreements, the role of the business angel and a clear exit strategy. View the overview of different types of advisors on KVK.nl.