What is a business angel?

Business angels are mainly interested in businesses with a new idea or companies in the (rapid) growth phase. They should be able to grow to greater turnover and profit within a few years.

A good fit for you?

Are these also the characteristics of your business? Then a business angel or private investor might be for you. Business angels often prefer companies from the sector in which they themselves have been active or from their own region.

Loan or shares

A business angel can lend you the money or buy shares in your business. A combination of a loan and shares is also possible. When a business angel invests money through shares, the investor buys shares in your business. The busisess angel then becomes a co-owner of your business and shares in its profits from then on. The investor then also gets a say in your business.

A business angel can also give you a loan. You can subordinate this loan to other loans. This means that you pay back the business angel only after your other loans have been repaid. Subordination can help you attract other loans. A loan can also be convertible. That means you can convert the loan into shares in your business.

A business angel usually invests in businesses with growth potential, but it is not always certain that this growth will be achieved. The investment is a form of venture capital. Is the business they invest in successful? Then they make a profit. Does it go wrong? Then they lose their money.

Things to look out for

A business angel will invest in your business if it sees that the company is making a profit or is going to grow. The investor wants to help you make your business successful. The investor puts its own knowledge, experience, and network to work for you. Check whether the experience and network of the business angel suits your company and be open to the advice and guidance of a business angel.

A personal and business click between you and the business angel is necessary. As is mutual trust. After all, you will be making decisions together. For example, do you have the same vision for growing the business? And do you tell each other everything about all things in the business? Make good agreements about the role, expectations, and control of the investor and set them out on paper.

Investment amounts

Business angels invest with amounts ranging from €50,000 to €750,000. They increasingly invest as part of a group with other business angels. They then have more opportunities, spread the risk of the investment, and can exchange mutual knowledge and experience together. The amounts they invest can then reach up to €2 million.

Preparing your application

Are you hoping to attract a business angel as an investor in your business? Then make sure you have a detailed business plan and funding application. The Guide to working with business angels will help you establish a good collaboration with your investor.

Help with business financing

KVK’s Financing Guide helps you find your way in financing your business. Do you still have questions? Call the helpline on 088 585 11 11 or ask an expert.