With the forthcoming launch of the online business angel network Angels Den, founder and managing director Bill Morrow is keen to point out that there is lots of money in the pockets of business angels waiting to be invested. SmallBusiness.co.uk reports.

What is a business angel and an angel network?

Business angels are usually wealthy individuals who provide capital for start-up or early stage companies in exchange for equity. Angels Den is a network of over 2,000 of these individuals that is designed to be approachable and very un-bank. Companies can sign up to for an initial fee to try to attract the attention of investors.

The angels search for businesses using specific criteria depending on their interests, rather than being spoon-fed lots of companies they aren’t interested in, and businesses only have to pay more if a match is made between themselves and an investor.

How can a business angel network help?

Business angels are simply not happy unless they’re investing money, because it means they’re not making money, one of the major problems is access to funding.

Related: Top UK angel networks for your start-up

I have been approached by banks, accountants and lawyers that have clients under their wing, so to speak, that are perfectly bankable in principle, but just don’t have the assets. We’re aiming to put investors in touch with these companies and create a ‘win, win, win’ situation for all three parties.

Getting in touch with investors is one thing, but how do you convince them that your business is a viable opportunity?

The best piece of advice if you want angel funding is to write a sound business plan. Only around 15 per cent of companies write a plan and of those who do, around 90 per cent end up still trading after three years. Whatever type of funding you are going for, you need to be thinking about who your plan is being written for, so try to tailor it to your audience.

What else can a business owner do?

Obviously, you want to be sure that the angels you are meeting aren’t going to laugh at you and a better understanding about what they’re looking for will help.

If you’re meeting with business angels, be aware that they are probably only in it for the money, but they don’t want you to be. You’ll have to show that you are passionate about your business and have a keen enough understanding to earn them the money that they feel they deserve.

Do you have to understand the money side of the business?

I’m afraid if you’re just not a numbers person, you’re dead in the water. You need to be thinking about the financials, your exit strategy and likely costs: know the numbers and be comfortable talking about the assumptions you have in your business plan in terms of sales and competitors. A business angel will want to have confidence in your abilities for when things go wrong.

See www.angelsden.co.uk for more information about the Angels Den network.

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