If you have not made a business angel investment before, there are a few things to consider before investing in a company:
- Obtain experienced legal advice for assessing documentation, structuring the deal and drawing up agreements.
- Obtain experienced accountancy assistance for assessing the business plans, other due diligence and personal and corporate tax advice.
- Plan how you expect to achieve a return from your investment provided the investment is successful. i.e. dividends, fees, capital gain and how that might be achieved. .
- Find out about the entrepreneur and management team's background and track record. Establish whether the entrepreneur, fellow directors or any of the management team have been bankrupt or been a director of an insolvent
company and the facts behind this experience.
- Consider investing alongside an experienced business angel. Business angel networks may be able to put you in contact with an experienced angel who may be interested in investing in the same company you are considering.
- Be patient. It often takes a lot more time than many business angels anticipate to find the right company in which to invest.
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