Business angels come at a cost
Nov 02 2007
Business angels can play a vital role in small business start-ups, but their involvement can sometimes have a negative impact as well, a leading business expert claims.
Investment from high net-worth individuals can often provide a significant boost for new SMEs but problems can occur when the owner and the business angel fail to see eye-to-eye, the expert warns.
Andrew Georgiou, managing director of ARCH Business Ventures, highlights just how important it is for SME owners to make sure they have researched the background of a potential investor and can be confident their personalities will be compatible.
'It's a double-edged sword. The business angel can be very helpful in taking the company forward or they can be instrumental in taking it in the wrong direction,' he says.
He adds, 'If you can get along with the people and you know that your personalities fit and you're like-minded, then there's a good chance you'll do well out of it.'
Figures published by the British Business Angels Association revealed that business angels invested in 184 companies in 2005, with a total investment of nearly £29 million.