Archives For Equity Funding

One of the key components to successful crowdfunding is the involvement of angel investors who are proving to be a lucrative source of finance for businesses of all shapes and sizes.

It’s a good idea to understand exactly what an angel investor can bring to your business, so let’s take a look at their makeup and objectives.

The Basics of Angel Investing

Angel investors are those investors who look to invest their own capital in to investment opportunities such as crowdfunding for equity. Their investment will be made as either an individual investor or a group of investors.

Their aim, as with all investments, is primarily long term profit, but they also promise to bring plenty of experience to the project as well to help support the business and grow. Ideally, these angels are looking to make a return on their investment within 3 – 8 years.

In the UK there are estimated to be around 20,000 angel investors, but this number is steadily growing as the success of crowdfunding schemes gathers more pace. Despite a relatively small number of investors, they are regularly contributing around £850m per year which marks them out as highly productive investors.

Are Angel Investors the same as Venture Capitalists?

The traditional funding source for a business has been through venture capitalists, but angel investors are a very different and modern phenomenon.

Venture capitalists tend to deal in high amounts of capital – sometimes a minimum of £1m – whereas angel investors are more likely to invest in smaller amounts from £5,000 up to £500,000. This marks angel investors out as highly desirable investors when it comes to crowdfunding for startups.

Due to the large risks taken by venture capitalists with their weighty investments, they tend to delay the investment process due to their due diligence processes. Angel investors, however, are dealing with much smaller amounts of capital and are able to make their decisions much quicker.

And venture capitalists will often insist on forming and joining a board of directors to keep a close eye on their substantial investment. Angel investors, though, are much more likely to take a passive role in the day to day running of any investments.

What Appeals to Angel Investors?

Angel investors are usually wealthy entrepreneurs and have a keen eye for a good business opportunity. As a result they will look for certain aspects in a business to confirm it’s a viable investment opportunity.

The first port of call will be to identify and evaluate the team behind the project. Those teams which have amassed plenty of experience and relevant skills will always make for an attractive proposition. As with all business ventures, communication is vital from day one, so dealing with angel investors’ queries needs to be prompt and accurate.

Secondly, angel investors will strive to understand the project to see what their investment will be funding. They tend to favour projects which solve visible problems in unique niches as this promises better returns on their investment than opportunities in crowded marketplaces. And, of course, the potential returns on their investment need to be clear from day one.

Angel investors, then, stand out as a unique funding opportunity be it crowdfunding for equity or startups. Their investments can be seen as highly important steps in advancing the potential of business opportunities and improving performance.

Crowdfunding is a popular way for small companies to raise money and provides many marketing opportunities that would otherwise be unavailable. Since many ideas that are crowdfunded are innovative and exciting, it levels the playing field for smaller companies to develop their products.

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UK-Crowdfunding-Association

We are pleased to announce that Crowd for Angels are now proud members of the UK Crowdfunding Association (UKCFA).

The UK Crowdfunding Association was formed in 2012 by fourteen crowdfunding businesses. Their aims are to:

  • Promote crowdfunding as a valuable and viable way for UK businesses, projects or ventures to raise funds.
  • Be the voice of all crowdfunding businesses in the UK  (donations, loans and equity) to the public, press and policymakers.
  • Publish a code of practice that is adopted by UK crowdfunding businesses.

Crowd for Angel’s director, Tony De Nazareth, said: “We are really glad to become part of this credible organisation and work towards improving the crowdfunding environment for both investors and companies. We will work hard to support the UKCFA’s values.”

Crowd for Angels is the first regulated crowdfunding platform for equity and debt funding for both Private and Public companies. We support UK companies through all stages of their lifecycle, from seed, developing, pre-ipo and when listed.

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  • Crowd for Angels is the first platform to provide funding for companies through their growth cycle, from seed to listed
  • First directly regulated debt and equity platform
  • Launch pitches include AIM listed Advanced Oncotherapy Plc
  • Enables listed companies to generate funding outside of traditional circles
  • Gives investors access to products normally reserved for institutional clients.

Crowd for Angels, the first crowdfunding platform to provide funding for companies from seed all the way through to listed has launched today. The platform, which is also the first directly regulated debt and equity platform, already has three live pitches.

It is launched by Tony De Nazareth who has over 30 years’ experience of investment banking, venture capital and lending. He has combined his experience and knowledge of finance with his interest in social media and technology to create an innovative source of funding that competes with, and has the potential to replace the traditional sources of funding for companies.

The launch pitches include film company Mughals, The Series Ltd, which is looking to raise funds for a new high end prime time TV drama, the Mughals – supported by actress Mamta Kaash; Bet Fast Ltd, a mobile software company which provides software to bookmakers & stadiums; and AIM listed company Advanced Oncotherapy, a provider of radiotherapy systems, which has a £22.7m market cap and recently raised £6m through traditional channels.

Director and founder, Tony De Nazareth comments: “This is the first time that a directly regulated crowdfunding platform combines debt and equity pitches in one place. I want to bring innovative and appealing products to the crowd, fund companies through all phases of their growth cycle and also enable companies to find funding outside of traditional circles. Crowd for Angels presents a unique and appealing platform to the crowdfunding sector offering niche products that other platforms do not offer. We are challenging the status quo by developing new ways of doing things such as having a minimum and a maximum fund raising target for pitches which does away with the standard ‘all or nothing’ approach. The fact that we have a listed company as one of our opening pitches speaks volumes about the need for a new crowdfunding model such as ours. The beauty of our platform is that a company can begin with raising seed capital and carry on being funded through to Pre-IPO and when listed. Companies can use our platform to get fast and flexible financing on their terms and investors have an opportunity to invest in attractive products that would not normally be available to them.”

The benefits of Crowd for Angels include:

For Investors

  • No fees
  • Up to 50% tax relief on investments through SEIS and EIS
  • Short term convertible loans, thereby reducing the probability of default with the option of converting before maturity.
  • Invest from as little as £25
  • Investors can potentially make returns of over 10 per cent
  • Crowd for Angels platform is regulated under the April’s FCA guidance on the sector

For companies

  • A Minimum and Maximum target – funds are released on the minimum target being reached
  • It provides funding for the entire growth cycle – from seed to listed
  • Two funding targets, that allows companies to gain access to funding more quickly
  • Nominee structure so companies only deals with one investor
  • Reduces the chance of a drop in share price on conversion, as multiple investors with different risk profiles and time horizons are unlikely to convert and sell at the same time.

FCA Authorisation.

Crowd for Angels —  January 27, 2014 — Leave a comment

Crowd for Angels are pleased to announce that we are now a FCA approved platform for equity and debt investments, making us the first crowdfunding platform to have this type of direct approval for debt and equity funding.

As we work closer to the launch, we look forward to welcome both investors and companies on our platform.