Sometimes, the best that we can happen is that a Business Angel is crossing in our way. And that is that, behind this figure, it hides a retail investor willing to invest time and money in our project.

The Business Angels are individuals with a broad knowledge of certain sectors of the market and with investment capacity, driving the growth of business projects and small businesses with high growth potential in the early stages of life.

What is the difference between a Business Angel of an investor traditional? Basically, the first differ from classic investor and corporate venture capital in its involvement in the management of the project or company in which decide to invest. In this sense, like the entities of venture capital, bet on a business project, without being involved in the day to day, but bring added value. Some of its main characteristics are as follows:

1. Investing its own money.

2. It invests in the initial stage of the life of a company.

3. Their investment decisions may be different from the motivations strictly financial (professional satisfaction, linking family, etc. )

4. Invest only in areas close to their place of residence.

5. The amounts invested are much lower than the average that involved the entities for venture capital in each operation.

6. The disinvestment, in contrast, tends to be more slowly than in the case of the risk capital investors.

7. The profitability is generally lower than that obtained by the entities of venture capital.

Networks of Business Angels

In many instances, these investors, are organized in networks. The networks of Business Angels are organizations that are intended to bring small and medium-sized enterprises, new or in growth phase, with investors informal and private. In this way, met two main functions: bringing together the Business Angels and increase the effectiveness of its process of contact with investment projects interesting.

Normally, these networks financed operations of between 25,000 € and 250,000 € (or about 25 percent of its capital available), in societies with prospects of rapid growth that would allow a disinvestment in the medium term, between 3 and 5 years.

In terms of its practical operation, normally incorporated into its network both new firms as companies that want to launch an expansion project.

The collection of business projects is made by different routes: universities, business schools, business incubators, technology parks, consulting… These projects, after joining the network, are analyzed and validated, and was ruled out of the network those who are not eligible for funding.

On the other hand identifies potential Business Angels who have the ability and, above all, the expectation of investing in business projects with a high degree of risk. Once they have been identified these Business Angels by different routes (groupings employers, chambers of commerce, consultancy and other economic circles), also continues a process of identification of the expectations of investment in each of them.