Angel Investors Manchester
You hear the word “angel” and what comes to mind? A glowing, floating being? Yeah, thought as much. When it comes to angel investors in Manchester, these particular angels, also known as private investors, seed investors or angel funders are high-net-worth individuals who provide financial backing for small startups or entrepreneurs, typically in exchange for ownership equity in the company. Drop Studio can help you!
In this blog we’ll explore:
- What is an Angel investor
- How to find an angel investor in Manchester
- Pros and cons of angel investors in Manchester
- How to negotiate with angel investors in Manchester
What is an angel investor
Angel investors are wealthy individuals looking to invest in startups at their earliest stages. Many angel investors have launched a successful business of their own. It’s usually a better idea to pitch your startup to an angel-investment network rather than approaching them individually. Here’s a list of angel investment networks in the UK, each of which specialize in different areas, business types, and industries.
Often, angel investors in Manchester are found among an entrepreneur’s family and friends. The funds that angel investors provide may be a one-time investment to help your business get off the ground or an ongoing injection to support and carry the company through its difficult early stages. Does this mean get up and ask your friends and family for money? Not quite.
Angel investors in Manchester are individuals who seek to invest at the early stages of startups. These types of investments are risky and usually do not represent more than 10% of the angel investor’s portfolio.
It’s important to not that most of these angel investors in Manchester have excess funds available and are looking for a higher rate of return than those provided by traditional investment opportunities. That’s where you come in.
Angel investors provide more favorable terms compared to other lenders, since they usually invest in the entrepreneur starting the business rather than the viability of the business.
Angel investors in Manchester are focused on helping startups take their first steps, rather than the possible profit they may get from the business. Essentially, angel investors are the opposite of venture capitalists.
How to find an angel investor in Manchester
The easiest way to find an angel investor in Manchester is through Drop Studio. Chances are you’ve decided to raise funds privately and need help. Drop Studio is more than willing to partner with you.
When looking to release equity to angel investors, you need the right tools and strategy to be successful. Firstly, you need to find who you are going to approach in the hope that they will become your next investor.
Secondly, you need a well articulated and professional pitch deck to give investors the key information they need to make an informed decision. Finally, you need a solid strategy to tie everything together and ensure a successful raise. At Drop Studio we take care of all of that.
Pros & cons of angel investors in Manchester
As with any and everything in life, there are pros and cons where angel investors are concerned.
Angel investments are merely a more flexible and less formal way to raise capital, especially compared to more professional investors, such as venture capitalists, and angel investing isn’t right for every business. You may find that getting startup business loans may make more sense for you, given your situation.
Before you begin the process of pursuing angel investors for your business, we have listed a few pros and seven cons for you to consider:
Pros of angel investors:
- Paperwork is minimal
- Monthly payments aren’t required
- Guidance and support are included
- Networking opportunities are provided
- Assistance with future funding is available
Cons of angel investors:
- Terms can be ambiguous and funding can be slow
- Average amounts are less than venture capital
- An option for investors to convert debt to equity is required
- Angel investor support and guidance may be limited
- Founder control is reduced and roles may be unclear
How to negotiate with angel investors in Manchester
Alas you’ve made it to the point in your business where scalability and growth are imminent and you’re pursuing funding. You’ve found potential partners, or angel investors in Manchester but don’t know what exactly to do or say.
As an entrepreneur who wishes to develop his or her business, you must regularly find external investors to help you finance your activities and expand. Angel investors come in handy whenever you need a capital injection during the tentative stages of your business. How you negotiate with an angel investor goes a long way in determining whether you will receive funding or not.
- What role do your investors want? After securing a meeting with a potential investor, make sure you identify that investor’s objectives in funding your startup. Your presentation should include aspects pertaining to the involvement and position you wish your investor to take. Highlight how you want the investor involved once they fund you. If the investor does not show an interest in being involved (passive investment), make sure to emphasize that his or her involvement, although welcome, is not a prerequisite for the success of the company.
- How much do they have? At the end of the day, you need money. Before you approach an investor, ensure that you understand their capital limits. Try to learn your investor’s portfolio, interests, financial background, and risk-taking history. The negotiation process should also give you the opportunity to understand whether a prospective angel investor has the ability to provide the funds you need. The offer you make to an angel investor needs to be equal to his or her financial capabilities. A high ask can discourage further negotiation, while a low ask may deter the investor’s interest. Knowing your investor’s funding limits will help you score a good investment deal and maximize the investment size.
- Make them trust you. Securing funding from angel investors involves building their trust in you. You need to show your reliability, competence, and sincerity to an investor. Be consistent in your presentation. Otherwise investors will lose trust in you and lose track of your message.
We support you as our clients in finding angel investors, venture capital investors and to run successful funding campaigns. To date, we have helped raise over £50 Million for our clients. You could be next.