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Business Angel

The term Business Angel refers to an investor who takes a stake in a start-up in the early stages. He provides founders with the necessary start-up capital. He also brings business know-how to the company and uses his networks. Thanks to these networks, start-ups establish contacts with potential business partners and customers. For Business Angel, the investment aims to increase the value of the company within a few years and to sell its shares at a profit.

Why is a Business Angel important for financing?

Many startups face the problem of not getting bank loans. Especially in risky areas like e-commerce and the IT industry as a whole, many institutions fear default. A Business Angel does not shy away from this risk, instead he focuses on the high return opportunities. He minimizes the risks by spreading his capital over many start-ups. An insolvency is then of little consequence.

What forms do Business Angels take?

This term covers a broad field. Business Angel s can be:

  • Individual investors
  • associations of private investors
  • professional investment companies
  • Subsidiaries of corporate groups

In this country, many Business Angels have joined forces in the association Business Angels Netzwerk Deutschland.

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