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.
You can find more information on this topic here:
Do you have any more questions?