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Welcome to the fascinating world of business angels

Welcome to the fascinating world of business angels! It can be many things, but boring is not one of them.

Halo investors have put over £11m of their own money into NI companies - across a range of sectors and stages of development. While angel investing is not for everyone, it has great variety and the ability for the angel to provide more than ‘just money’ i.e. to get involved with the companies if they wish. If this sounds of interest to you, we would love to see you at Halo!

The term business angel originally came from Broadway where ‘angels’ invested in shows. It has now broadened to mean any private investor in companies with which they have no connection.

Business Angels, regardless of age, have capital, experience and expertise they are willing to invest. They normally want to buy into a small firm where they can benefit from a good potential investment return, while often being able to play a part-time role in advising the business.

They are generally successful entrepreneurs themselves, or perhaps senior managers from industry, looking for the opportunity to invest in up-and-coming small businesses.

There is no such thing as a typical business angel but one thing they have in common is that they invest in people as much as in business propositions. A good business plan is necessary but never sufficient to clinch a deal. The chemistry between the investor and the management has to be right for both sides.

Angels can and do make money. Reports show average IRRs of over 20% and on top of that the UK enjoys some of the most generous angel tax breaks in the world. However it is very easy to lose money, so you need to approach angel investing in the right way.

Fortunately Halo is well placed to help here as we bring some of the most experienced angels in the world to run angel master classes and we provide these on our private video site.

It’s also worth saying that the statistics are clear about angel investing. There are relatively few successes, but those that occur can be very successful. Or to put it another way, it is best to spread your investments over a number of companies to try to ensure that somewhere in your portfolio there is one good winner.

Halo Experience

Many people ask about the amount of time needed to be an angel and the truth is that there are many different ways to approach this.

So, if your career is at a stage where you do have time, there is a lot of benefit in spending some time with the companies you have invested in – but not too much!

Studies suggest that the optimum is 2 days per month, since above this you may be interfering and it’s best to let the entrepreneur get on with it. To achieve a good spread of investments and still spend this amount of time with companies is difficult, if not impossible.

Fortunately the answer is to work in groups with other angels to share the work. Halo has a number of such groups working under the Halo umbrella.

For very busy investors, Halo also provides a further option. It operates a Halo fund which allows time-poor angels to invest in Halo companies, but following other angels who are leading the deals.

There is a voting system in the fund, so that you can have some involvement in the decisions made if you wish.

Finally, we’re often asked why people become angels. After all it is high risk/high reward investing and it can take a lot of time depending on how you approach it.

Well, we ask our angels the same question and of course the first answer we get is to make money. Yes, you can make money and fantastic tax benefits do help. But when we press further we get what are perhaps the real reasons. We hear: giving something back, helping create jobs in our own area, and for our own kids. And of course – it’s great fun.

Come along and see for yourself!

To explore this opportunity further, contact us (see below) or apply to Halo.