Angels Den Blog

Is There a Property Market Recovery?

2009-07-01T10:32:00.001+01:00

As an entrepreneur, you undoubtedly perk up at the suggestion that a property market recovery is right around the bend. You know that the property market has a huge impact on the overall resilience of the economic landscape. If a genuine recovery were to be in the works, consumer behaviour would indubitably change, banks would loosen their grips on the purse strings, cash flow would once again permeate economic enterprises, and business profits could be right around the corner…

But this begs one critical question: is the news of a property market recovery real, or is it merely wishful thinking?

The Truth behind a Property Market Recovery
According to the BBC, a property market recovery is indicated by statistics from the Royal Institute of Chartered Surveyors (RICS) that show a falling number of properties falling number of properties on the market and a rising number of buyers interested in them. Activity is up and supply is down—just the formula needed for a property market recovery.

Another snippet of news reported just a couple of days later indicated that figures from the Council of Mortgage Lenders (CML) showed that the number of mortgages for home purchases has risen.

Of course, the flip side of this is that these numbers are still significantly shy of the figures from just a year ago, and (more importantly) to turn a window shopper into a bona fide buyer, the interested party now needs to come up with 25 per cent of the home’s value as a deposit—a figure that is significantly higher than in previous years.

So is the property market recovery made up of 25 per cent wishful thinking?
At the peak of the market, a buyer could quite easily find a bank willing to lend him or her the money for a home purchase. A deposit of 5 or 10 per cent was all that the buyer needed—and if he or she found this too much to scrape together, then there were always the 100 per cent, 125 per cent, and self-certification mortgages from which to choose. Entrepreneurs in the property refurbishment, renovation, and maintenance sectors enjoyed the boom created (at least partially) by these mortgage products. Of course, some of this lending was wholly irresponsible: a buyer putting him or herself in negative equity from day one in the hope that the market will continue to rise is an accident waiting to happen. Nevertheless, flawed as such mortgages were, they resulted in a run on properties—and more sellers felt that they could actually afford to buy and sell their homes.

It is for this reason that the news of a property market recovery is to be welcomed—albeit with some reluctance. Banks are no longer lending quite as liberally as they used to and only qualified buyers need to apply for loans. What is today being hailed as a property market recovery may truly be little more than savvy investors bankrolling agents to take over soon-to-be-vacant properties. It may also be little more than homeowners who simply cannot afford to hold onto their properties any longer doing their level best to get at least some return on their initial investment. It is highly doubtful—especially in light of last year’s property figures—that a genuine property recovery is in the works that is sustainable beyond the investor purchases and on-edge homeowner sales.

Of course, hope springs eternal and, as an entrepreneur, you know that it doesn’t take a lot to nudge the market one way or another. So perhaps simply the idea that there is some stabilisation—that the market might at least have bottomed out and that a property market recovery was at least on the cards—could generate some upward mobility in sales. If this were to be followed with a genuine effort from the banking sector to produce affordable mortgage products (after all, 25 per cent is a little steep and the first-time buyer really needs a break in the form of a 90 or 95 per cent mortgage), we might at least be able to begin to hope for a long-lasting recovery.

7 Things to Do Before Turning 40

2009-06-29T10:27:00.001+01:00

Have you ever whiled away an afternoon avoiding your daily office tasks, pondering the meaning of life, and daydreaming of all of the things that you’d rather be doing than sitting at that desk? If so, then you’re likely have a list much like this one, prodding you to move forward and accomplish your personal and professional goals while you’re still young enough to enjoy your success.

But if you’ve yet to establish your own list of seven things to do before you turn 40, here are some suggestions.

Surf the big waves off Hawaii – Surfing the peak-season waves off of the northern shore of Oahu in December and Waikiki Beach in July might mean two trips to the islands—but two trips to Hawaii are always better than one.
Visit all Seven Wonders of the World – What better excuse to wander around the world on holiday than to admire each of the Seven Wonders of the World in all of their splendour? Whether you choose to see the seven natural wonders of the world, the sites of the seven wonders of the ancient world, the seven underwater wonders of the world, or the wonder of the No 7 bus to the World’s End pub in Camden is, of course, up to you. Who knows? You might even meet a business Angel along the way who can help you to attain #6 on our list! Stranger things have happened…
Learn a new language – Most of us were required to take a language at school—but imagine becoming truly fluent in a language of your choosing simply for your own personal satisfaction. Knowing at least one additional language might also come in handy when accomplishing #2.
Own a flash sports car – This is something that you really ought to do before you turn 40—partly because when you start having children, a two-seater will be the first thing that you’ll have to get rid of, and partly because the older you get, the more likely you are to be accused of owning one as part of a mid-life crisis.
Invent something that helps mankind – Whether it’s a selfless endeavour to further the advancement of society, or a brilliant money-making creation that just happens to enhance the daily lives of all who own it, inventing an innovative product or gadget just might lead to #6 or #7 on the list—and could certainly to help fund #1–4.
Own your own business – A brilliant idea at any age, owning a business by the age of 40 is an excellent way of removing yourself from the doldrums of working to make someone else rich, and making all of your dreams a reality by becoming your own boss, setting your own schedule, and taking the reins to control your own life. Setting out with an entrepreneurial spirit, the drive to succeed, and perhaps a business Angel or two in tow will undoubtedly lead to accomplishing—and even exceeding—your personal and professional goals.
Become a business angel – Once you’ve become wildly successful from owning your own business and are rapidly working your way through the rest of your list, there’s one more thing that you should do before turning 40. Becoming a business Angel will be perhaps the most rewarding and satisfying accomplishment of your life, because it will show that you’ve truly ‘made it’ and are now in a position to help someone else with the drive, motivation, and tenacious spirit that got you where you are today. Becoming a business Angel should be the ultimate goal of any entrepreneur or business owner who yearns to feel the ultimate sense of accomplishment that comes from supporting a new generation of professionals as they come into their own.

Everything on this list is absolutely attainable by anyone with the vision and drive to achieve their dreams. Anything is possible with hard work, motivation and perseverance, and striving to own a business and become a business angel before turning 40 is a sensible, reachable goal that will result in an unmatched sense of pride and success.

Everything on this list is absolutely attainable from becoming a business Angel who helps small businesses to raise their finances to spending your money on more entertaining pursuits. All you need is the vision and drive to achieve your dreams. Anything is possible with hard work, motivation, and perseverance, and striving to own a business and become a business Angel before turning 40 is a sensible, achievable goal that will result in an unmatched sense of pride and success.

Now is the time to create your list of dreams, establish your goals, and use your drive and dedication to reach your full potential. Visit www.angelsden.co.uk to find out more about becoming a business Angel or gaining funding for your new venture.

Don’t You Go Changing Now

2009-06-26T10:16:00.001+01:00

In this loan-shy banking era, Angel finance is one of the most frequently used methods of financing a new business, and more and more small business owners are taking advantage of this lucrative opportunity.

So what is ‘Angel finance’? The ‘Angel’ is a wealthy private investor—not bound by the rules of a venture capital firm, but governed solely by his or her own common sense—who is looking to invest in new opportunities. If your business could benefit from a capital injection to boost its chances at success, then it is this type of person whom you will need to impress.

With this in mind, we have compiled our ‘top three’ rules for pitching for Angel finance

Pitching for Angel finance rule #1—Be yourself
When pursuing Angel finance, be yourself. Don't try too hard—the prospective investor is likely to see right through you. Remember, these wealthy individuals got to where they are today because they're savvy entrepreneurs used to sifting out the truth. They won't be impressed if they discover that you’re putting on an act to impress them—and they will be able to tell. Besides, nobody likes a kiss-up.

It’s only natural to want to do well in what could possibly be the most important meeting of your business life, but presenting a persona invented for your Angel finance pitch in the belief that it will show an investor what they want is a bad strategy. So if you're not funny, don't try to crack jokes when pitching for Angel finance—and if you're not naturally sombre, don't try to button it down. Start simply by being yourself. If you come across as unnatural or uncomfortable because you're trying too hard to impress the investor, he or she will pick this up and feel less inclined to invest in you.

Pitching for Angel finance rule #2—Keep it short and professional
At an Angels Den SpeedFunding event, you will have just three minutes in which to present your case for Angel funding to each investor. Remember, these are wealthy individuals and you're not the only one clamouring for their support. So while you need to be yourself, you also need to make your pitch professional—complete with all of the relevant information about your business, and its facts and figures. In short: you should know your stuff.

Think about an excited new mum or dad: they can answer any question about their baby. They know how much she weighs, what time she was born, what birthmarks she has, and where. Your business is your baby—and you ought to be prepared to answer any question that the investor might have, with the information right at your fingertips.

Make a list ahead of time of the questions that you might be asked during your pitch for Angel finance and make sure that you have those answers uppermost in your mind. If you have to dig for the answers (‘Um… Good question… Let me see here... I know I have it somewhere...’), you'll end up wasting time and looking unprofessional.

Pitching for Angel finance rule #3—Honesty is the best policy
While you must be honest in being yourself, you must also be honest in relation to your business. If you try to inflate the facts and figures, once again, your potential investor will find you out. He or she may discover your omission or exaggeration long after your pitch—but whenever they do so, their trust and confidence in you will be destroyed. So when you make that graph, or when you write up that product comparison, stifle the urge to manipulate the truth. Of course, you love your business or your business idea. Of course, you think it's a great idea—it's your own idea, after all. But just because you think it's great doesn't mean that you need to come off sounding like a cheap used car salesman.

If your potential investor smells something fishy—such as a prospective sales figure for the first year that sounds a little too optimistic, or an assertion that you'll definitely crush the existing competition without so much as a whimper from them—your pitch will be over before it really gets started.

So good luck with your Angel finance pitch: remember to be honest, professional, and—most importantly—be yourself, and it’s sure to go well.

You Are What You Wear & Private Investors

2009-06-24T10:58:00.001+01:00

So, congratulations: you've earned a meeting with a private investor. You must have done something right to impress him or her in order to get this far, so don't stop now—keep impressing your business Angel throughout the pitch that you'll be giving.

Think about what a private investor will be looking for in a prospective business partner. The private investor is looking for someone who's professional, who carries themselves well, who's comfortable in their own skin, and who's in touch with what's happening in the world. But he or she also wants to see if the person in whom they might invest is a risk-taker. The private investor wants to know that they are investing in someone with some ‘chutzpah’, some leadership—that is, someone who doesn't just follow the herd.

So what should you wear to that first meeting with your private investor?

What you're wearing is the first thing on which a private investor will judge you, before you ever open up your mouth, show them your graphs and your reports, and before you even flash that toothy smile for which you're so famous. A private investor will be checking to see if you’ve dressed to impress—or if you’re taking the meeting lightly by dressing as though it's just another night out at the pub.

The question, then, is this: who do you use as a role model for your business dress sense?

Are you a Richard Branson?
Sir Richard Branson always looks immaculately dressed, even when sporting a shell suit for his record-breaking attempts—but his favorite look is smart shirt, no tie, top button undone, and a jacket. Sir Richard pioneered the successful entrepreneurial ‘smart casual’ look. The man who started his first successful business when he was just 16 years old certainly doesn't have to wear a tie if he doesn't want to!

At Angels Den, we like this look: too casual and it looks as though you’re not taking your private investor meeting seriously; too trussed up in a suit and you’ll look out of place—most of our SpeedPitching events are relaxed affairs.

Are you an Alan Sugar?
For those who can't pull off ‘the Branson’ for their private investor meeting (and let's face it, not all of us are blessed with Branson's innate sense of style), there's always the look of Sir Alan Sugar.

The ‘Alan Sugar’ is a bit more formal than the Branson. Being comfortable is the most important thing for a private investor pitch, so if you feel more natural in a suit and tie, then go with that—although, at Angels Den, we would suggest that even if you love your pinstripe, you should probably lose the tie.

Are you a Deborah Meaden?
Deborah Meaden, of Dragon’s Den fame, has her own personal stylist, so it’s not surprising that she looks the part each week on the show. Often found in traditional black or grey, she goes for a very simple corporate style, with no flourishes of colour and no eccentricities—just clean lines.

A perfectly acceptable look for the successful businesswoman about town, the Meaden can seem a little bland to a private investor who is looking for the ‘wow’ factor in the person pitching to them—but it is certainly the ‘safe’ option.

Are you a Lois Cook?
Co-founder of Angels Den, the UK’s premier private investor and entrepreneur meeting place, Lois Cook has a very different view on style: ‘First impressions count, and how you present yourself to a private investor at your pitch will go a long way to opening the door of opportunity for you.’

Lois believes in presenting a smart and professional look—but adding a touch of creativity to suggest an innovative mind. The trick is to dress up without looking too formal, to be feminine without being distractingly sexy, and to stand out from the crowd.

Overall, when you meet your potential private investor for the first time, you want the way in which you're dressed to send a message—and that message should read: ‘I’ve got what it takes.’

Let Me Sleep On It: The Importance of REM Sleep

2009-06-22T10:50:00.002+01:00

We all know what it’s like to work 20-hour days when launching an entrepreneurial effort or running a business. There’s always one more project to complete, one more task to cross off of the ‘to do’ list, or one more idea on how to impress the small business investors that we’ll meet. We then stumble off to bed for what amounts to a quick nap—and get right back to it, bright and early in the morning.

While we’ve convinced ourselves that our efforts and long hours are a testament to our commitment and necessary for the success of our endeavour, taxing our bodies and our brains to the point of exhaustion may not be the best way for small business investors and entrepreneurs to travel down the road of success.

A recent study led by Sara Mednick, PhD, of the University of California (UCSD), has demonstrated, once again, that obtaining adequate sleep is an essential component for making good decisions—particularly when it comes to creative problem solving. Numerous similar studies have touted the benefits of a proper night’s rest and, intuitively, we know this to be true; Mednick’s study centres specifically on the benefits of rapid eye movement (REM) sleep.

How many times have you made a presentation to small business investors, or presented an opportunity to a client, only to be told that they would ‘sleep on it’ and get back to you the next day? Taking time before making a decision has become such a common part of our everyday lives that these phrases have become valid and accepted—albeit occasionally frustrating—business talk. And it is not only small business investors and clients who are putting off their decisions overnight: everyone, from corporate CEOs to our dear old mums, are promising to ‘get back to us in the morning’.

Small business investors, entrepreneurs, CEOs, and parents have always known the importance of taking their time to ensure that they are making the right decisions—and now, there is scientific research to back them up. According to the UCSD study, REM sleep allows our brains to form new networks, increasing creative thinking. This, in turn, leads to more creative problem solving and better decisions for your investments or business.

This most recent study adds to the mountain of research verifying that we need proper sleep, regular breaks, exercise, and a healthy diet in order to think clearly, make good decisions, and perform to our fullest potential. When we deprive ourselves of any of these essentials, our personal and professional lives will suffer. This can include making poor business decisions when we are under pressure or working on minimal sleep—and small business investors and business owners know that even one bad decision can be devastating.

This goes to show that working a little less and making the time to take care of ourselves can make all the difference in the success of our endeavours as small business investors and entrepreneurs. Eating properly, getting enough sleep, taking a walk, and even going on holiday every once in a while are all good for you and good for business.

So, the next time that you’re rushing to make a decision after 18 hours at the office, consider setting it aside for the night and coming to a decision in the morning. After a good night’s rest and some proper REM sleep, everything will look clearer in the morning sun—and you’ll not only lower your stress level, but you’ll also find that you’re making better business decisions all around.

Happy Times Are Here Again – Well, Almost!

2009-06-22T09:37:00.000+01:00

Angel investors are very sensitive to the predictions of recovery in the market, because every false claim or ‘green shoots of recovery’ debacle knocks consumer confidence back further, delaying the chance of a true recovery that will benefit everyone. Whatever the market conditions, there will always be entrepreneurs seeking to launch or grow their businesses—but those conditions and the state of the market remain one of the most important things at which Angel investors will look before they get their chequebooks out.

Angel Investors Heartened at Unexpected Output Rises
The only constant in business is change and, in some cases, the changes are rather unexpected—even if they are most certainly welcomed. When the BBC reported recently on a surprise increase in the UK’s output, it underscored this tenet rather nicely.[1] This unexpected windfall replaced the dire predictions of a continued output fall that left Angel investors wondering just when they would see conducive market conditions again. Best of all, manufacturing rose in and of itself, making Angel investors and manufacturing entrepreneurs sit up and take note. After all, when the manufacturing sector is up, the rest of the industrial sector is likely to follow. In turn, a healthy industrial sector fuels the rest of the economy, and—voila!—recovery is virtually inevitable (or, at least, that’s the theory).

Alright, so the increase of 0.2 per cent may seem puny—but it was wholly unexpected and unaided, which might have a few economists scratching their heads for a while. Who’s to say that this upward trend won’t intensify—in spite of economists’ most dire predictions—and perhaps even continue for a prolonged period of time?

Adding the Consumer to the Recovery Equation
Of course, before Angel investors get too giddy at the good news and splash their cash around in a joyous release, we should remember to consider the consumer in all of this.

As an experienced Angel investor, you’ll know that no matter how high the output of the manufacturing sector might be, if consumers are not buying what you’re selling, it’s all for nothing. While supply is revving up, demand is still the variable in the equation that is most difficult to predict. Just a day earlier, the BBC suggested that, while the economic recovery was finally getting a bit of lift, we might just be hovering precariously close to the bottom for a while longer, making for what it terms ‘a bumpy ride’.[2] After all, if consumers fail to hold up their ends of the bargain, the manufactured goods will simply end up collecting dust on store shelves.

This might have Angel investors holding back for a while longer—but it’s interesting to note that now might actually be the time to loosen those purse strings and get behind a potentially successful business idea. What is more, entrepreneurs themselves should now be seizing the opportunity of picking up where top-heavy competitors lost out and fell flat on their faces. It is often during that time just before a recovery that it is best to invest. Angel investors can make up the missing capital in a potentially explosively profitable venture and, before long, new businesses will stud the economic landscape. Having learned their lessons from past companies’ business failures, their survival rates will be proportionately higher.

Angel investors and entrepreneurs working together to build new ventures breathes new life into the economy, which is now gradually, but tentatively, coming back. Any business that can establish itself now stands to profit from the returning consumers that are once again placing their confidence in companies that have either weathered the storm or sprung up during the downturn. Moreover, leaner and meaner business models make it possible for entrepreneurial spirits to push or pull the British economy back on its feet.

Sir Alan (or is it Lord Alan) – You’re Fired

2009-06-19T08:42:00.003+01:00

Young entrepreneurs looking for tips on how to succeed in the corporate world probably could have happily avoided the embarrassment and masochism of watching this year’s The Apprentice (I, of course, was doing so only for research purposes.) If you are a regular viewer of this annual circus show, you’ll be used to the usual choir of seriously deluded individuals attempting to sing from the hymn sheet of the man with the beard.

This season, however, did introduce a couple of notable exceptions to the seemingly standard rule of contestants chosen from among the scrapings at the bottom of the entrepreneurial barrel…

The one that got away

I must admit that I wasn’t a fan of Debra Barr when she started on the show. What was explained away as ‘drive’ and ‘enthusiasm’ might, more accurately, be labelled the traits of a mouthy character with a superiority complex and an ability to step on anyone in her way without regret. Her capacity to sell was never in question: she proved time and time again that she was talented—but how did she survive the boardroom run-in with Nick Hewer? If a young entrepreneur were to talk to me like that, they’d be out the door so fast that their feet wouldn’t touch the ground!

But then, just like the bearded one, I began to find something endearing about her determination to succeed—even if it was a little forcefully misplaced at times. She was, I’d argue, ‘the one that got away’: failing to select her for the final was a mistake. She had proven that she was able to tame ‘the beast within’ and had taken on board the many criticisms that had been levelled at her in the boardroom, maturing during the course of the show into a very credible candidate. Debra had proven her talents and her ability to be moulded into the apprentice for whom Sir Alan was looking.

As young entrepreneurs go, then, I think that she’s a winner—and that she may ultimately do better in her career as a result of having not been chosen.

The successful young entrepreneur
It is only my personal opinion, but as good as Yasmina Saidatan was, I’m sorry to say that I don’t believe that she should have won the show. This is not a reflection on her abilities and talents: she is very obviously an intelligent and capable young entrepreneur who did very well on the tasks that were set. But as an interviewer, I would always have had my doubts about her commitment to the end goal—that is, the job itself. As a successful young entrepreneur already with her own business, she has proven her ability to do the job, but also that she has revelled in the independence of a family-run business. Could she—or would she want to—survive in the corporate environment, doing what others told her, planning her day around the needs and demands of others further up the corporate ladder?

Having run my own business for some time now, I’d have to say that I’d rather gnaw my own left foot off than go back to an office environment in which other people tell me what to do. The transition is a massive one—and one of which I, as an employer, would always be wary were a candidate such as Yasmina to be sitting in front of me.

It’s my belief that taking the job is only likely to stifle a young entrepreneur such as Yasmina—and that it won’t be long before she realises this and starts to get itchy feet.

The “perfect” candidate
So, finally, this brings us to Kate Walsh—who was robbed.

I’m sure that I’m not alone in my confusion over why Kate didn’t get the job for which she was so perfect. It amazes me that doing everything right should be used as a negative in a job interview. It was the only criticism that anyone in the process could level against a candidate whose skill set seemed to contain every element needed to win The Apprentice: sales; marketing; interview technique; presentation, etc. In fact, the thing that startled me most was that even after these attributes had been proven week on week and listed at the final decision point, the be-bearded one still said that he was worried that Kate might a be a one-trick pony!

Crazy—although, once again, I’m sure that Kate Walsh has big things ahead of her and that we all wish her the very best.

Young entrepreneurs beware!
If you’re a young entrepreneur, just starting out in corporate life, and you’re keen to soak up all of the information you can about being a successful young entrepreneur, don’t watch this show with anything more than a healthy dollop of cynicism. The Apprentice is not only a job interview; it is also an entertainment show and a forum for Sir (Lord) Alan to promote his business, his TV career and his new political status.

If you’re genuinely looking for a boost into the business arena, then follow the path taken by many a young entrepreneur and visit www.angelsden.co.uk to find out how we can help you to fund your business ideas and inventions to make them the successful businesses of tomorrow.

Young Entrepreneurs Defy Economic Downturn

2009-06-12T10:43:00.001+01:00

In the past, stories of young entrepreneurs would make headlines simply because it was so unusual to see school leavers go into business for themselves rather than joining an already established company. Of course, in today’s business environment some graduates have little choice in the matter, and rather than becoming gainfully employed, their choices are either starting up their own businesses or joining the unemployment queue with so many others.

When the going gets tough, young entrepreneurs get innovative
A recent BBC News article provided a tough reality check for young people ready to leave school or university: it was revealed that only about one in five companies would be looking to employ school leavers this year. Adding insult to injury, a third of businesses have made graduate employees redundant this year alone, and almost half of employers asked said that they were not looking to take on any new employees from either of these groups in 2009. It is uncertain what this group’s employment future will be, but it doesn’t look good from here.

The lack of life experience and work skills put this age group at a heightened risk of entering unemployment virtually immediately after leaving education. Of course, there are some brave individuals who don’t let little things like the economic downturn and recession-enforced job losses hold them back. Young entrepreneurs are starting up businesses, and find themselves capitalising on book knowledge, classroom experiences, and buckets of enthusiasm and drive to get their entrepreneurial dreams off the ground.

Young entrepreneurs have the advantage
It makes sense that business-savvy young entrepreneurs have better odds at succeeding in today’s competitive environment than their classmates who are content with simply sending out copious letters to potential employers. While still sometimes looking for work with an established company, these young entrepreneurs also set up a business, craft an Internet presence, and incorporate all of the laws of business they learned about online, in the classroom, or from the papers.

If the new business is profitable, the young entrepreneur has the fiscal success that would have otherwise eluded him or her in the traditional workforce. On the flipside, even if the business fails to yield a sufficient income, the experience is extremely valuable. What is more, when properly incorporated into a CV, youthful entrepreneurship has the power to open doors that have thus far remained shut in the faces of graduates and recent school leavers.

After all, even if a company is hesitant to add a younger worker to the payroll, a young entrepreneur with a track record of at least trying to carve out their niche in the economy is looked upon more favourably than one who has been content with just waiting it out. The notation of an attempted business venture on the CV may even have the power to offer quicker upward mobility within a company than might otherwise have been possible for a young worker.

Is it not time that you took a chance and made the most of the skills you already have? You are never too young to get started as an entrepreneur, and the potential of turning your hobbies or passions into a lucrative business venture beats sitting on your hands any day. Who knows, a few years down the line you might actually be the one who gives jobs to your former classmates! Is this alone not worth the plunge into entrepreneurial enterprise?

Financial adventurers WANTED!

2009-06-10T10:26:00.002+01:00

Angel investors are canny individuals who know that there is money to be made by helping inventors and small business entrepreneurs get their commercial enterprises off the ground. Imagine contributing your capital – perhaps also some personal expertise and business contacts – and reaping great financial rewards in the process.

Capitalising on Private Equity
Rather than playing the stock market and taking their lumps and bumps with failing financial institutions, angel investors capitalise on private equity. The latter comes in the form of private companies that may not go public for five to ten years, and as such offer potentially profitable pickings for a limited number of players. In return for providing some initial seed money and investment capital, angel investors get a lion’s share off the profitable top. Is it risky? You bet! Is it highly profitable? You better believe it.

The Need for Angel Investors
Economic uncertainties have left banks tight-fisted, and small business loan applications are being rejected as a matter of course these days. Many small business entrepreneurs and start-up companies are desperate for capital and willing to sign any kind of business deal that will get them their much-needed funding.

For angel investors, this can be a very lucrative a market niche so long as they choose their investments wisely. Imagine adding angel investing to your overall portfolio of skills and realising some serious profits in a number of companies that you – to a point – have a measure of say in. Is this not entirely different from the bank where your money is currently sitting, or the stocks you own that are going topsy-turvy?

Making Money in Angel Investing
You may have noticed that angel investors are in a league of their own: they are visionary investors who are not looking for immediate returns on an investment but know that their payoff will be two, four or five years away. They have the capital to allocate to these long-term investments, and are canny enough to recognise a money-maker when they see it and follow their gut feel and industry know-how to invest in these opportunities.

Not everyone can join the elite ranks of the angel investors; those who buy and sell investments in a matter of weeks or get spooked over the slightest market hiccup should not apply. Moreover, those with money but not vision are also strongly discouraged from becoming angel investors.

Instead, this exclusive group is made up of shrewd members of the business community, ready to put their money to work and to keep an eye on their investments. This is truly an opportunity for investors who firmly believe that they are the makers of their own fortunes.

Looking for Angel Investors
Angel investors ready to take money matters into their own hands would do well to visit us at www.angelsden.co.uk. Here you’ll find all the advice and assistance you might need to get started as an angel investor with Angels Den and thousands of investment opportunities just waiting for your funds to help them to explode into the business success stories they were destined to become. As we have the largest number of angel investors in Europe, you’ll be in good company, and through our regular SpeedFunding events you’ll have face-to-face access to some of the best fledgling businesses in the UK today.

.

What’s in a name?

2009-06-08T14:18:00.003+01:00

One of the most critical decisions you’ll make when starting up a new business is what to name it. While it might seem a rather unimportant or simple thing, in reality it is loaded with importance and can have major ramifications for the success – or lack thereof – of your venture.

If your business ever needs private funding to help it achieve its goals then the name of your business may well play a part in the business Angel’s thought process.

A name that clearly reflects the nature of your business is a popular choice, but some would say that it lacks creativity. Opting for a more unusual, yet ambiguous, name might generate some buzz – or doom your company to obscurity and make you struggle to obtain customers, recognition or even private funding. Here is the debate from both sides:

Argument for choosing an obvious name
Generally speaking, new small businesses are best off selecting an obvious name. If your business name explains what you do then half the battle is already won. An organisation called “Scribbles Writing Services” requires no introduction. You already know that they are a firm of copywriters offering a variety of writing services to meet their clients’ needs. If the same firm had been called “Polygon”, for instance, someone unfamiliar with the firm would be none the wiser for knowing their name.

A simple and clear concept will always be easier to promote and understand; therefore choosing an obvious name for a business could reduce the amount you’ll need to spend on promoting it. Anything that requires explanation or continued exposure to enter the public consciousness takes a lot of money to achieve.

If your business is going to look for private funding at any point then those offering the capital will need to understand with great clarity what your business does. Your business name is the important starting point of this process. Purveyors of private funding agree that first impressions count.

When Google hit the scene in the late 1990s, no one knew what they did based on their name; it was their intensive (and very expensive) marketing campaign that drew the right people – and private funding – in. Because most start-up businesses have small budgets, choosing a clear, unambiguous name is a cost-effective strategy – and it helps make advertising their goods and services far easier.

Argument for choosing a random name
Obvious names are boring – what you really need is a name that will be remembered, one that you can attach the right imagery or corporate identity to so that everyone thinks of your business when they hear it. Look at Orange: what does this name have to do with telecommunications? Nothing at all.

A great example of a company that has been successful with a name that has nothing to do with their business is Monster.com. Launched in 1999 with the merger of The Monster Board and Online Career Centre (notice that they could have gone with this more obvious name but didn’t), they rapidly became the world’s most popular job search websites.

Why did they select such a random, unrelated name? Because it is simple and memorable, and using the marketing techniques that they did they were able to create a strong association between their name and what they offered. In their case, selecting a random name was a strategy that paid off. Had they opted for a longer, more convoluted name, they'd have had a much rougher time standing out among other career-building websites.

Conclusion
When select a name for a new business it is important that it works well within your sector and your budget. Using a name that is memorable is one thing, but you have to have the finances to back this up or the buying public will forget about you very quickly, and without the buying public behind you any chance of achieving private funding could go out of the window.

If the only thing that stands between your business and massive success is a lack of capital, then come to www.angelsden.co.uk where you’ll find Europe’s largest network of private funding specialists waiting for the right opportunity behind which to put their capital.

Why the recession may ignite your entrepreneurial spirit

2009-05-22T11:13:00.000+01:00

Is your office laying off workers? Are jobs being outsourced to other countries for the sake of the bottom line? Are branches of your company shutting down? Is your store going out of business? It’s a tough old time for British businesses and their employees at the moment, whatever sector they’re in. Closed shops and massive reduction signs are quickly becoming the norm in the retail landscape, and there is little indication that this will change in the near future. Not surprisingly, the unemployment figures are up and, according to the latest statistics, over two million people are out of work

Depressing thoughts, I know, but while this showcases the UK’s inclusion in the worldwide economic downturn, there is a silver lining to this dark global cloud—that is, renewed entrepreneurial spirit. The numbers of individuals and small groups of entrepreneurs with outstanding business ideas are rapidly growing, and so is a new infrastructure for helping them. It is interesting to note that this new trend towards turning business ideas into businesses is open to all socio-economic groups. No matter where you are from, or what your accent, age, schooling, sex or social status might be, you have an opportunity to turn the sour grapes of unemployment into the champagne of small business success.

Customarily, entrepreneurial spirit appeared to have been reserved for the upper middle classes with significant venture capital at the ready. This trend is changing, and even some straight from education are now entering the marketplace and turning their business ideas into new companies. Some operate from the privacy of their own homes, converting their garages into miniature factories and manufacturing venues, or their bedrooms into international online venture HQs. This is a heartening trend. As entrepreneurial activity reaches new heights, public perception of small business ownership has also changed.

Attempting to change public perception here in the UK is rather like a very small ant attempting to push a rather large elephant in a direction in which it doesn’t want to go. As a nation, we have always considered employment with a venerable institution to be the pinnacle of pay-packet success. The tradition of working for ‘Jones, Jones and Smyth’ from school to retirement was revered, and the pursuit of business ideas considered merely folly.

The economic climate has forced everyone to reassess their views on many things. After twenty years as an accountant with Jones, Jones and Smyth, you may have been made redundant due to recession-led cutbacks—so now what do you do? Finding a job these days is not easy, so eventually you may decide to set up your own practice. If 2009 is the year in which you’re due to graduate from university, there are fewer jobs out there for you now than at any time in recent history—so now what do you do? Leave and sign on the very next day, or take your technology degree and a few friends from class to set up your own venture?

If the recession has ignited your entrepreneurial spirit and led to new business ideas, you will find that, in spite of the recession and the grim economic outlook, there is plenty of fertile ground in which start-up businesses can take root. While established companies are suffering under a weight of bad debts, lowered revenues, and outdated structures and methods, new ventures find that their versatility and adaptability makes them highly competitive. What is more, new entrepreneurs brimming with clever business ideas are much more likely to utilise the most up-to-date technologies for promoting and conducting their businesses, leveraging cost savings and pushing forward on far smaller budgets than those that the established crowd could ever work with.

To boldly go…

2009-05-20T11:07:00.000+01:00

With the launch of the new Star Trek movie, you have to reflect on our unwavering respect for those who break new ground, push boundaries and boldly go where no “one” has gone before. Entrepreneurs are the Captain Kirks of modern business as they risk everything to develop new ideas and bring us new and exciting experiences, all in the name of exploration – and profit, of course (tight red or gold lycra outfits are optional). Just like any adventurer, real or fictional, they deserve our respect and should inspire us all to greater things.

Captain James T. Kirk is now cooler than ever before, as actor Chris Pine plays his risk-taking, snap-decision-making younger version. During a recent interview, Pine described how it was a little intimidating to take on an iconic role such as Kirk, especially considering that William Shatner will always be considered by some hardcore Trekkies as the “only” real Kirk they will ever recognise. But, as Pine stated, director of the 2009 Star Trek movie JJ Abrams instructed the cast to forget what had come before in the roles, to breathe new life into the characters, and to make them work for the fans of 2009.

The result is a hotheaded young Kirk, who continually defies the odds and continues to boldly go where no Star Trek captain has gone before. By all accounts it’s a great movie, and some are even suggesting that it’s the best prequel ever made. As I’m seeing it tonight, I’ll soon be able to judge that one for myself!

Today's enterprising entrepreneurs may not get around at warp speed, or have Romulans to contend with and whole planets to save, but they do have the breakneck speed of 21st-century commerce, competition to defeat and a business to keep alive during the toughest economic climate in memory. But as a Star Fleet officer asks young Kirk after a bar fight in the film trailer, why settle for an ordinary life? Kirk was meant for more – something every entrepreneur and Angel investor must have thought about their own lives at some point in time.

Entrepreneurs are people who aren't satisfied with the humdrum, run-of-the-mill life. They are visionaries, adventurers with incredible instincts coupled with expertise in their field. Hats off to the entrepreneurs of this recessionary era, because even while all their friends may tell them they're crazy for starting or keeping alive a new business during these rough times, they move forward with an unwavering confidence that would befit a starship captain.

And then there are the Angel investors who help these entrepreneurs to fulfil their business dreams. What exactly is an Angel investor? An Angel investor is an individual investor whose hands are not tied by the strict regulations of a traditional bank, or even by the nervous, money-oriented board members that run a venture capital firm. Angel investors may not give as much start-up money to a new business as some more traditional sources of capital (often the amount is under £300,000), but they are often the unsung heroes behind a successful new entrepreneurial venture.

Angel investors are often less money-oriented than they are inspired by the entrepreneur's vision. Like the Star Fleet veteran young Kirk meets in the bar, they see something special in the entrepreneur, something that sets him or her apart from the thousands of other people who dream of owning their own business. Also like that same Star Fleet veteran, Angel investors are often former entrepreneurs themselves, who know what it's like to start something from scratch, and to take a business from launch to success. Angel investors could be compared to the later James T. Kirk of Star Trek: Generations, who steps in to help a beleaguered Jean-Luc Picard...after a little convincing. During the trailer for that movie, the voice-over states, “The torch of adventure is about to be passed.” Angel investors play the same role for today's entrepreneurs: with their financial support, they pass the entrepreneurial spirit from one generation to the next.

Top 5 Reasons Why Your New Business Needs An Accountant

2009-05-19T11:01:00.003+01:00

One of the most difficult aspects of opening the doors to a new business – aside from the marketing, developing your product or service, interviewing employees, small business funding, and ensuring that business regulations are being met and followed – is finding a good accountant. Starting a new business is never easy, and to have someone by your side, even if the task is outsourced, who can point you in the right financial direction is essential to the success of your venture.

So here are our Top 5 reasons why you should spend time finding just the right financial expert for your business:

1. Cash flow is king!
Don't listen to anyone who tells you otherwise. Many great ideas have died on the vine owing to poor cash management. A good accountant will ensure that more money is coming in than going out, and if profits are not high enough they can identify how to get your business back on track. An accountant should be sufficiently distant from the business to not let anything other than the bottom line affect their judgement and decisions. When your cash flow demands it, they will also be able to advise you on the best methods of attaining small business funding.

2. An accountant can keep you organised.
Opening a new business creates a mountain of paperwork, and tracking receipts on top of inventory orders, Companies House submissions and those HM Revenue & Customs brown envelopes that just keep popping through the door can be a daunting task. An accountant can organise and complete much of this paperwork for you, lining up who owes you and who you owe. Keeping up to date with your finances can help you to tell whether you’re following the schedule that you laid out in your business plan. It will tell you how your venture is really doing and whether you have the funds to move your business forward.

3. It’s more than just the balance sheet.
While you can't expect them to be experts in all areas, most accountants have more than a passing knowledge of tax codes, rules and regulations, small business funding, and many other financial matters that you may not be aware of. They can keep the numbers straight and keep overeager business owners from accidentally getting into trouble. They can also identify potential financial stumbling blocks on the horizon and work with the owner to create a plan to overcome those hurdles. If the business owner wants to expand a product line, but cash flow is such that it won't allow it, an accountant can work with the owner to make adjustments to meet that goal. Sometimes this means adjusting the business plan; sometimes it involves seeking additional finances from small business funding sources such as banks, venture capitalists or Angel investors.

4. There is strength in numbers.
The majority of first-time small businesses are one-man (or one-woman) operations, and without a track record it is sometimes difficult to secure additional small business funding to move your venture forward, employ staff, develop new products and services or promote your business. Small business owners wear multiple hats, doing the work of many people in a traditional office, and therefore it is all too easy to get too close to a project. Even if they don't work in the office, an accountant can give your business the sense that it is a much larger company; they can offer advice on the condition of the company’s finances and ways to improve profits, and can identify where decisions may be affecting the profitability of a venture. So rather than just controlling cash flow and crunching numbers, a good accountant can take some of the strain off your one-man/woman band.

5. They can present you in the best light
Finally, if you do decide to seek some form of small business finance, an accountant can help you to prepare your business to present it in the best light and so increase your likelihood of attracting the interest of small business funding investors.

Time and time again we at Angels Den see good ideas failing to achieve the small business finances that they need because of poor financial planning and presentation. A good accountant is essential right from the earliest stages of a business to help you to create and stick to your financial plans, to gain small business funding and to develop your venture into a growing business. If you’re interested in finding out more about small business funding, come to our website at www.angelsden.co.uk. An accountant will be able to show you how to present your finances for greatest impact, but if you would like a little help improving the impact of your presentation to our Angel investors, why not check out our presentation master classes.

We’re in it for the long haul

2009-05-13T11:41:00.000+01:00

We all know that the economy looks rather gloomy these days and, just to raise our spirits a little, the BBC recently reported that the economy isn't expected to recover fully until 2012. Pundits don't have much good to say about the near future and even though consumer confidence is starting to rise a bit, it's easy to see that most people still feel skittish and nervous when it comes to what’s in their wallets.

But in this economic dark age, savvy entrepreneurs can still thrive. If you know where to look, you can still find ‘business angels’ who can lift your venture out of the mire of the recession and on towards brighter futures. These business angels aren't the translucent kind with wings and halos; rather, they are angel investors—wealthy individuals who want to find a place in which they can put their capital and experience to good use.

Who are these business angels?
During these tough times, finding a bank—or even a venture capitalist—prepared to fund a start-up or new business is close to impossible. Venture capitalists usually represent a group of wealthy individuals or an investing institution, and they typically make investments that start at a minimum of £600,000. But business angels are independent, wealthy individuals who are investing on their own behalf. Usually, these business angels make smaller investments, in the £10,000–£100,000 range. This amount is often sufficient for the small business or start-up that needs just enough seed money to get it jump-started.

The great thing about finding a business angel who can help to fund your venture is that many of them have successfully built their own businesses from scratch. They know what it's like to go through the tough early days of a business and, much like you, they are innovative risk takers. As such, their reasons for investing in your business often go beyond simple monetary return: they remember what it was like to be in your shoes and many of them invest because they want to see you succeed.

Are business angels difficult to find?
You might be thinking to yourself: “Well, all of this is great, but I don't know any wealthy investors. Where am I supposed to find these business angels?”

The answer is simple: this is the twenty-first century, so you need to go to the same place that you find everything else—the Internet. Angelsden.co.uk offers small business owners and inventors the opportunity to promote their concepts to business angels from around the world to vie for their funding. It’s simple and easy to use, and has brought more businesses and business angels together in recent months than any other angel funding service in Europe.

Business angels will need to be convinced that your business is a reliable place for their money to grow. As when you find an investor through traditional channels, you shouldn’t expect to win business angels over with only your charm and wit: you must be able to demonstrate that you understand your business and its market, that you have a solid business plan, and that the niche that you will serve is strong enough and broad enough to survive the economic downturn.

Small businesses and start-ups, coupled with funding from business angels, offer a real lifeline to our ailing economy. By defying the odds and ignoring the black picture that the BBC statistics paint, these businesses could bring renewed prosperity and employment as they grow. A venture that has been created to weather the storm of a recession will no doubt flourish when market conditions revert back to something more business-friendly.

So forget the pundits and the boffins with their statistics and gloomy predictions: if you have a business idea with clout, visit www.angelsden.co.uk and ask our business angels for a little help. They just might give your venture the boost it both needs and deserves.

PLEASE cut out the jargon

2009-05-08T12:34:00.002+01:00

If this blog entry were to be jam-packed with terms such as ‘golden parachute’, ‘out of the box’ and ‘low-hanging fruit’, you would probably write it off as a load of old waffle—and no one would blame you. So if you’re an entrepreneur, why should things be any different when you’re stood in front of a panel of business angels whose funding could change the future of your business?

If an entrepreneur explains a new venture using pretentious jargon, business angels will immediately assume that he or she is showing off or lacking in substance. Clever wordplay is no substitute for real acumen and business angels are masters at sniffing out the make-believe from among the moneymakers. Business presentations must be based around solid facts and figures, explained in clear language. Whenever large amounts of money and trust are involved, there can be no ambiguities and everyone must understand each other; otherwise, the risks are too high. Business angels know that communication is one of the most important skills that an entrepreneur must possess—so it’s critical not to blow it at the first hurdle.

Regular viewers of the BBC show Dragons Den will be aware of how irritated these business angels get when some earnest inventor loses his or her nerve, gets tongue-tied and starts dropping in phrases half-remembered from the days of A level Business Studies. The dragons’ reaction is usually along the lines of “Get to the point!” or “Have you or have you not got projected profits for the coming tax year?”.

So is business jargon something new? In fact, it’s believed by some to originate from the ‘technical rhetoric’ of ancient Athens, some time around the fourth century BC. It’s a powerful image: toga-clad Greeks discussing the concept of ‘thinking outside of the box’ in between munching grapes and playing the lute! But we can assume that the business angels of that time had just as little patience for jargon as their modern counterparts.

(Incidentally, ‘thinking outside of the box’ was voted the most annoying piece of business jargon in a recent British poll conducted by YouGov. Forty-nine per cent of respondents picked this as their pet hate, although 20 per cent actually believed that knowledge of jargon—or ‘buffling’, as some call it—would help them to progress in their careers. Forty-six per cent said that the disease had spread beyond the office, with ‘touch base’, ‘blue-sky thinking’, ‘360-degree thinking’ and ‘singing from the same hymn sheet’ now being bandied about at home, in the pub and on the golf course.)

Perhaps this blog has slightly confused business jargon with business clichés for comic effect—but the two have become inseparable. Nowhere is this truer than in all of the talk around the current ‘credit crunch’ (or ‘recession’, as we are now being told to call it). The media are happy to mix up specialist terminology (‘collateralised debt obligation’) with meaningless frivolities (‘smashed piggy bank’), without caring whether anyone understands any of it at all. The point that entrepreneurs should remember, then, is this: when it comes to attracting the investments of business angels, there’s no substitute for plain speaking.

So what are your plans after university?

2009-05-06T11:29:00.000+01:00

Unemployment is on the rise, corporate recruitment is plummeting and new graduates are facing tough decisions when it comes to finding employment after university. Of course, this isn’t the first time that the world has faced an economic crisis during which graduates have been expected to make difficult choices, and it’s sure not to be the last. But with conventional employment prospects looking decidedly dim, now, more than ever, entrepreneurial graduates need to embrace this opportunity to shine.

Each year, as graduation nears, students begin to explore the employment opportunities open to them and generally assume that, after graduation, they will move from student to entry-level employee in their field of choice. Historically, this assumption has been correct and graduates have moved from the classroom to the boardroom (or at least the post room) via paid internships, corporate recruitment, and good, old-fashioned applications and interviews. But, now, times have changed—and what used to be a fairly streamlined path into the business world is fraught with obstacles and stymied by hundreds, or even thousands, of applicants for each vacancy.

In the light of this economic downturn and diminishing recruitment levels, graduates are confronted with a critical decision: do they face a daunting job market and hope for the best, or do they seek out small business funding, create their own jobs and go it alone?

This, of course, begs the next question—one that is directed at the rest of the business world: should it provide small business funding to these young start-ups and encourage this entrepreneurial shift, or will hundreds of small businesses, with some destined to fail, only worsen an already precarious economic situation?

On the one hand, we will have a generation of young business owners struggling to swim in an unfamiliar sea. But while some will undoubtedly sink, others will rise to the occasion and prosper—and all will learn valuable skill sets and gain important experience that will help them later in life. On the other hand, then, it is possible that by providing the small business funding that will get these endeavours off the ground, we will be working to build a new business model that will bring young professionals with fresh ideas into the fold—a model that will stabilise and strengthen the economy over time.

Really, what do we have to lose? The jobs simply aren’t out there and graduates have to explore other income-earning options, one of which is starting their own businesses. Entrepreneurship isn’t for everyone, but the idea is becoming more appealing as conventional job opportunities diminish and graduates are faced with stiff competition, even for the most menial jobs.

Graduates with a ‘go-getter’ entrepreneurial spirit are moving to Plan B and creating their own income opportunities by starting businesses. From creating a business plan and seeking out small business funding, to devising a marketing scheme to increase brand awareness, starting a business allows graduates to use the knowledge that they have gained over the past few years to jump-start their careers and stay off unemployment benefits.

By supporting these efforts with small business funding, business angels have the opportunity—some may even say ‘privilege’—of being on the ground floor of a growing movement with investments that could very well be safer than the present-day stock market. Graduates will gain marketable skills, which will increase their employment prospects when the economy turns around (should they decide to go in that direction); investors who supply small business funding can rest easy in the knowledge that they are doing a good deed and might just see a nice return on their investment.

If you are leaving university this year and have a killer idea that you are passionate about launching on the unsuspecting British public, then why not come to www.angelsden.co.uk to see how small business funding from our investor angels could help make that dream a reality?

City inadequacy encouraging female entrepreneurs

2009-05-05T11:25:00.000+01:00

Don’t get me wrong: I’m no feminist… I’m very much a man’s man—a bloke hailing from north of the border, for goodness’ sake — but I don’t think that you need to have two X chromosomes to see that the issue of pay-packet inequality is completely ridiculous. Women have worked diligently for decades on end, trying to achieve what should be a relatively simple goal: equal pay for equal work. But this concept has continuously fallen to the wayside, and has not received the support and encouragement that it deserves. Even after years in the workplace working side-by-side with their male counterparts, the discrepancy in pay and incentives is undeniable—and unfathomable.

For example, an Equality and Human Rights Commission report has uncovered that women working in the finance sector earn up to 60 per cent less than men working in the same field. Perhaps we might expect that of some small, unenlightened area clinging to archaic sexist beliefs about a woman’s place being in the home, but this statistic relates to our beloved, cosmopolitan, diversity-celebrating City of London—and this makes it all the more difficult to grasp.

Having grown weary of unequal pay, and a general lack of appreciation for their efforts and input, highly skilled entrepreneurial women are now striking out to start their own businesses in record numbers. At the same time, the number of women who have decided to take on a private investor or business angel role has exploded, with these women putting their financial and entrepreneurial success to good use funding new business. Opportunities to become a private investor are increasing as women, as well as men, are setting out to test the waters of starting up their own businesses in their droves.

These new entrepreneurs are intelligent, capable women, whose knowledge and skill set has been underused in the conventional workplace and who are therefore incredibly passionate about succeeding in their ventures. The private investor who offers funding for these endeavours is not only making a smart business investment, but is also helping to address the equality imbalance.

We would do well to recognise the contributions of women in finance and other areas of business, and it is a shame that antiquated beliefs and practices, along with downright complacency, have created a situation in which women are being forced of necessity—and pride—to leave the conventional workplace and set out on their own to prove themselves as skilled business leaders.

But perhaps this movement is the silver lining to the dark cloud of inequality. Everyone in society today has to reassess their beliefs and preconceptions about their jobs, working environment and income security. With so much re-evaluation going on, perhaps experienced and dedicated female entrepreneurs and private investor partners will now have an opportunity to change the marketplace once and for all.

Female entrepreneurs and private investors are poised for success as they continue to establish a solid foundation in business and demonstrate that they are a force to be reckoned with. There is no better time than the present for all of us to support these women who are setting out on their own to earn what they are worth and to applaud the female investors establishing a growing influence in the business world.

At www.angelsden.co.uk, we have noticed an increasing number of ‘double X’ private investors over the last year. There also seems to be a never-ending supply of inventive or innovative women looking to start up their own businesses who come to us for advice and angel funding. And long may this trend last—because the private investor and entrepreneurial world has been a male-dominated place for far too long.

Swine Flu v Economic Blues

2009-05-03T10:55:00.002+01:00

Does anyone remember the global panic surrounding the “deadly” avian flu pandemic threat of 2005 when the media reported the potential of tens of millions of human deaths? It was all the papers could talk about for a while and people across the globe started wearing those silly surgical masks (which it turns out do little to stop the spread of the flu anyway). The business world reeled, banks, investors, venture capitalists all took stock to see what would happen to their portfolios should the world end that week!

Two years later it was the West Nile Virus that had us all in a panic. The Mail ran the headline, “Deadly mosquito has landed in Britain” because two Asian tiger mosquitoes were found in a back garden in Gloucestershire. But what was the mortality rate of this “deadly” mosquito bite? Unfortunately for the media, West Nile didn't pan out, either.

Since the 1995 Hollywood thriller Outbreak came to our screens scaring the pants off all of us over the “what if” scenario of an airborne virus the media seem to have be fascinated by the panic they are able to generate and how this translates into lots of viewers, lots of readers, and lots of pounds.

Two years later again and it is swine flu that has captured the headlines and sent us all into a spin. The world’s media has apparently forgotten last month’s story – that is: hello, does anyone remember that we're in a global economic crisis?

Swine flu has ripped through the lives of families in Mexico causing tragic loss of life, but with those surgical masks appearing on front pages of papers again, schools closing, the NHS going on alert and contingency plans going into effect around the world, anyone reading a newspaper or watching the TV could not have helped but felt the fear of “what if”. The world’s financial woes are forgotten for a little while thanks again to the all powerful media.

So here's a question: if media hype can lead ordinary people from Mexico to Britain to Hong Kong to wear hot, uncomfortable surgical masks that everyone knows doesn't work, all over a flu that turns out to be no worse than your average strain, can the same sort of media hype convince the world's consumers to spend; businesses to start marketing again; and venture capitalists, banks and investors to start investing to lead us out of a global recession?

Maybe so, but what’s in it for them?

But not all is doom and gloom – in fact, just like the swine flu “pandemic”, undoubtedly, part of the global economic pandemic is just more games for ratings by the mainstream media. They discovered a long time ago that death and destruction sells more papers and advertising than smiling school kids and good news.

A good indicator for economic recovery would usually be the lending habits of venture capitalists – organisations whose job it is to wisely invest money that is entrusted with them in dynamic new businesses. Unfortunately venture capitalists, much like banks, have pulled their heads inside their shells and have decided to wait out the economic storm. But whilst venture capitalists have slept a whole new lending machine has risen to the challenge. Small businesses continue to launch and grow even in this economic climate, but lack of funding has made things quite difficult for them, so Angel investing has grown into a funding force to be reckoned with. Unlike venture capitalists that have recession jittery board members, responsibilities to investors, and corporate procedures to follow, Angel investors can make funding decisions based simply on the opportunity that is presented to them. When venture capitalists resurface once they are sure the recession is over they will find that much of their territory has been taken over by this more agile, generous and arguably more successful way for small businesses to gain the funding to give their businesses a much needed boost.

The reason why Angel investors have thrived where venture capitalists have scaled back their operations is that they are natural risk takers. Putting up their own money to back a business opportunity that may be no more than a concept at this stage is what they do whatever the financial climate.

Gordon Brown seems to be getting on the bandwagon a little with his plans to set up a special bank to fund high tech ventures. And Alistair Darling, meanwhile, is lobbying for tax breaks for green technologies. It seems that venture capitalists are being attacked from all sides. Shame they’re hibernating somewhere or they might be starting to get a little worried. Sleep well all venture capitalists.

So even though the global financial crisis seems like a hole that will be impossible to climb out of remember, its depth is just another one of those things that the media just loves to exaggerate, and much like the passing of the swine flu pandemic panic (in a little over 2 weeks), the economic doldrums will also pass soon enough and we’ll be back out into an era of economic sunshine. Wake-up venture capitalists and see how Angel investors have changed the world as you know it!

Sometimes the simplest ideas are the best ideas

2009-05-01T10:21:00.000+01:00

All too frequently, entrepreneurs believe that the more involved and complex an idea is, the better it is likely to be—but, often, the opposite is true. Some of the most successful concepts of all time have been incredibly simple. As an example, while not necessarily an upper-strata success story, look at the idea of the Million Dollar Homepage — the brainchild of a 21-year-old British student looking for a way to raise funds for his university education by selling advertising space at a rate of US$1 per pixel on a single web page. Simple? Yes—but it has made him an international celebrity and a very wealthy man. Or look at Twitter—an incredibly straightforward concept when compared with the likes of Facebook, but one that was able to generate millions of dollars in angel funding and venture capital to launch and grow a concept that is now one of the world’s most popular social networking sites. People who come up with simple ideas can often attract very lucrative angel funding to help them get their plans off the ground—something that we at Angels Den have seen time and time again.

Angel funding is provided by wealthy individuals who have been convinced that a simple idea just might complicate their lives by making them even wealthier: in essence, it is small business investment, in which the angels put up their own money to fund a venture. These people seek out small businesses or entrepreneurs who have great potential and help them to achieve their dreams, making themselves a tidy profit at the same time. It is unquestionable that you are far more likely to attract angel funding to your business idea if you keep things clean, clear and simple. Unnecessarily complex, confusing and convoluted proposals can often put investors off.

The scientific community often uses Occam’s Razor to help it to develop theoretical models. The theory is this: “The simplest explanation is usually the best one.“ When it comes to business ideas, this same principle largely applies: if your idea works by a simple method, then there is absolutely no need to muddle it up with a lot of extra bells and whistles. Those offering angel funding are drawn to simple concepts and ideas, because it is much easier to add to, and develop, a good clear concept than it is to dumb down an overly complex one.

Just look at the world’s most popular search engine today, Google. Its website design is an exercise in simplicity, because Google’s founders appreciate that many competitors of theirs who had reached the dizzy heights of popularity lost their audience when they overcomplicate what they were offering. Google recognises that when people want to search the Internet, they simply want a search box and a ‘go’ button, and it has now not only produced iconic imagery for search engine development of the future, but it has captured the majority of web search traffic.

Angel funding is offered at the discretion of the angel investor, because, after all, it is his or her own money that the investor is risking. It is therefore important that not only should the angel be able to understand your concept fully, but also he or she should be able to see that everyone else in your target market will understand it as well. “Keep it simple” should be your mantra and if ever you’re tempted to add an unrelated gadget to your creation—think twice. Avoid overly flashy details that contribute nothing to the overall design. Then, when you have a clean, simple concept drawn up, begin looking for angel funding…

If you need any help or advice on angel funding, why not visit www.angelsden.co.uk? Here, you’ll find lots of information, hints and tips, and discover how and where you can pitch your ideas to angel investors to give your business the boost that it so richly deserves.

Creating the perfect business plan

2009-04-30T11:36:00.000+01:00

Anyone who's ever started their own business—and succeeded—knows just how important a good business plan can be. A good business plan is a road map to the life cycle of your venture: from joyous conception, to successful maturity and the ultimate exit strategy. To be classifiable as a ‘good’ business plan, it will require careful preparation and focused attention to detail to define every step along the way.

A business plan can be a complex document, but, when you remove all of the waffle and filler, it can be boiled down to the following four essential elements.

1. What is your business concept?
2. How will you let everyone know about your business?
3. What stands in the way of your success?
4. Does it stack up financially?

1. What is your business concept?
Every business is built around a concept and a vision. The more clearly defined this concept is, the easier it will be to know how to focus and grow the business. For example, the concept of ‘Joe Smith's Furniture' might be something like:

Joe Smith's Furniture will sell high-end dining and coffee tables to young, fashion-conscious professionals over the Internet.

Defining his concept at the beginning helps Joe to establish a niche for his business—an area in which he specialises that sets him apart from his competitors.

If you ever need to seek additional finance, your business plan will show potential investors that you have thoroughly considered your venture, and have a clearly defined idea and direction for your venture. All too many new business owners make the mistake of trying to be ‘everything to everyone’, rather than narrowing the focus of the business to a specific niche market.

2. How will you let everyone know about your business?
Crucial to every business plan is its sales and marketing strategy. Well before you launch your business, you must know to whom you will be selling and how you will promote your products or services to them.

Again, all too many first-time entrepreneurs design their strategies around the mass market—but unless you have a bottomless bank account, this is a difficult thing to achieve. You must define your target audience—their approximate age, tastes, location, employment, etc—with the accuracy of a police profiler. The clearer your vision of them is, the easier it will be to find them and to sell to them at their level.

How you promote your business to that target audience—online, newspaper, billboards, trade shows, shop front and concessions, and so on—will be determined by the profile you’ve created. Whichever route(s) you choose, your business plan needs to define your strategy and schedule for promoting your business clearly.

3. What stands in the way of your success?
When launching a new business, you need to be fully aware of your opportunities and barriers. These will include: your skills and experience, and those of others with whom you’ll work or whose skills you’ll utilise; your financial position; the economic conditions in which you are starting your business; and, most importantly, what competition you will face.

You must consider direct and indirect competitors, and, if there are none because you are launching a brand new concept, then you must consider what barriers there are to others entering the market and competing with you (in terms of cost, time, expertise, contacts, etc).

A good business plan also looks realistically at local competitors. Out of hubris, the new business owner might be tempted to discount these competitors—but investors won't and to ignore the risks in your business plan is a foolish tactic. Therefore, a good business plan carefully researches the competition before the business ever begins.

4. Does it stack up financially?
Finally, the perfect business plan must include a realistic three-year or five-year financial forecast. We all know that the facts and figures are the boring bit, and I appreciate that you just want to jump right in and start selling, but it is this planning stage that will provide the most important information for your business. Potential investors will need to see that you’ll make a profit and you need to know whether there is any merit in the venture before you launch headlong into it. A well-defined financial section to your business plan will also provide you with a road map to success against which you can measure your progress.

If you’re new to this sort of thing, ask for help from a family member who either owns his or her own business or is an accountant, or pop into your friendly local bank and see if it can provide you with information. Additionally, you should contact Business Link (which is always good for this sort of advice), or approach local businesses to see how much guidance they will offer.

Good luck writing the perfect business plan. When it’s ready, why not come to www.angelsden.co.uk to discover the best way in which to finance your new venture?

Haunted by the entrepreneurial spirit

2009-04-29T11:17:00.000+01:00

Lord Tennyson had it right when he wrote: “'Tis better to have loved and lost than never to have loved at all.“ In this context, we can paraphrase: “It’s better to have tried and failed than to have never tried at all.” (Actually, it’s better to have tried and succeeded—but this piece is all about having the gumption to try rather than to let opportunities pass you by, so I’m not going to split hairs.)

The desire to be an entrepreneur can range from a mild ache to an all-consuming passion. If you dream of owning your own business, don’t hide behind the comfort and security of an office job: go for it—or risk always being haunted by the entrepreneurial spirit…

We all hope that, when we look back on our lives in years to come, we will be able to say proudly that we have achieved and experienced all that we could have wished for ourselves. But the reality is that, all too often, our lives are filled with thoughts of ‘what if…’. Don’t let yours include: “What if I’d grabbed fate in both hands and actually made a roaring success of that business idea that I’d been thinking about for all those years?”

If you have a deep-seated desire to become an entrepreneur, there is no time like the present. Under current economic conditions, this advice may sound like madness and folly—but a good business idea is not devalued by the economy into which it is launched and, even today, there is plenty of private funding available to help good concepts backed by a solid business plan. In fact, many successful brands were born out of recessionary times and have gone on to global domination.

So why don’t more people follow their entrepreneurial dreams? The most common excuse used by people who are likely to fall into the ‘what if…’ category later in life is the lack of time and/or money with which to take such a big step in changing their employment status.

So let’s first address the time factor. Perhaps you’ve been made redundant from the job that you held for 15 years and employment prospects are looking a little bleak, with over 2.1 million others in the same boat: so what have you got to lose? Now, you have time aplenty to embark on that business that you were previously too busy to start—or even to think about clearly.

Of course, you might be lucky enough still to be in a job, but may fear redundancy in the near future. Starting your own business now offers you future employment on your own terms. Starting a business is not an easy way to a fortune, even with private funding backing you: it takes time and dedication. But get it right and you could become the master of your own destiny—something that very few employees experience.

But what if time is an asset that you have in abundance, but money is quite another matter? Very few people have enough of it and everyone could do with more. So many people are finding that their finances are in a worrying state these days. Savings are being tapped, mortgages increased and personal items sold on eBay just to make ends meet—so how on earth are you going to afford to set up your own business?

You could ask friends or family—but blurring the lines between business and friendship can be an uncomfortable mix. You could go to the bank for a loan—but the banks are not lending very much money these days, not even to major corporations. Venture capitalists are always interested in a good concept if you’re prepared to sign over a large percentage of your soul in the process—but even this stream of business finance seems to have dried up. So what are you to do?

Enter the world of business angels—those optimistic souls who provide private funding to aspiring entrepreneurs, helping them to launch or grow their businesses. Generally, these purveyors of private funding are high net-worth people who invest in fast-growing enterprises, either on their own initiative or as part of a larger group, or syndicate. In recent years, as more traditional means to acquiring business investment have disappeared, business angels have become an important source of private funding for entrepreneurs.

And in addition to private funding, these individuals often donate their considerable business expertise to ensure the success of their investments. Typically, business angels provide private funding to start-ups and small businesses looking to expand, and often look for those businesses to grow rapidly, with a planned exit strategy that will pay out within a few years.

So don’t be haunted by thoughts of ‘what if…’. Instead, follow your entrepreneurial spirit and let it show you the way to financial freedom. Private funding is an excellent way of allowing a small idea to blossom into a big business far more rapidly that you could have imagined.

If you’d like to find out more about private funding, business angels and speed-funding, visit www.angelsden.co.uk and set your entrepreneurial spirit free.

A Quick Look At SpeedFunding (Video)

2009-04-29T10:27:00.004+01:00

So you're considering registering for a SpeedFunding Event, you've read our quick introduction to SpeedFunding but you want a quick taste of what the events are like? Well here's a very brief video introduction of what you could expect:

And if you wanted to know when the next events are - click here.

Obsessed About Search Engine Optimisation

2009-04-28T11:14:00.000+01:00

Search engine optimisation (SEO) has become an obsession for businesses across the globe and throughout cyberspace—but do the spectacular claims made by its advocates stand up to analysis?

Since its very beginnings in the mid-1990s, SEO ‘experts’ (notice that I put this in quotation marks … just thought I’d point that out!) set themselves up as the people to go to if you wanted your online business to succeed. Just like the Wizard of Oz, they hid behind a curtain of mystery and misdirection—never quite letting on how they did what they did or knew what they knew —and they gained an almost unquestioning acceptance from the business world… For about 5 minutes, that is. After all, we would have to be stupid simply to accept what we’re told without the support of cold hard facts!

The SEO sector then entered a long dark period during which many distrusted its claims; others simply did not understand them—and only a few fell for my personal all-time favourite, “We can make you the #1 listing in Google”, which I sometimes still hear today and which still sends a shiver down my spine.

The SEO fraternity seemed to enjoy the status of warriors battling against the evil Google empire (and that of the other search engines, most of which are not really worth mentioning in comparison with the monopoly that Google has in the search market). SEO specialists were constantly trying to find ways of manipulating Google’s algorithms into accepting that their client’s websites were more important than they actually were. This tinkering with the truth and, sometimes, downright spamming represents what has more recently been called ‘black hat’ (unethical) SEO practices. These are seriously frowned on by search engines—which, quite frankly, can afford to have the best anti-SEO experts on their payroll to spot and penalise those who too obviously warp the system.

Remember: a search engine really only has one responsibility to its clients—that is, to return the most relevant information for the search term or phrase that was used. SEO manipulation of the search engine’s algorithms produces search lists that include only those firms that can spend the money to get to the top, so search engines spend a lot of time and money to make sure that their information is not influenced by outside forces.

Nowadays, SEO is all about ‘white hat’ (ethical) methods of optimising websites and blogs. It looks at the three fundamental elements that will determine your importance to Google (and the others, of course), as follows.

Is your website constructed correctly? Can search engines see every page that you want them to see? Has your site been made according to current web standards? What elements on your page are visible to search engines, etc? Your web developer should be able to complete this stage for you.
Are you an expert in your field? This is determined largely by the copy on your site. The optimisation of content in the visible and invisible elements of your page (that is, tags) is the job of the web copywriter, who creates the text with which to fill your perfectly developed website.
Do others recognise you as an expert in your field? It is generally accepted that this is evidenced by the number of incoming links that point towards your site (although the quality of the link is all-important, because most directories and article databases are now hardly worth their webspace).

So, can an SEO expert make you ‘the #1 listing’ in Google? Well, no. Not really. If they were able to do so, it would be probably be by using suspicious methods that could have you banned by the search engine (something that no business could possibly want to risk). A ‘good’ SEO specialist will, however, be able to adapt what you have into something that will present your business website in such a light as to increase its likelihood of attracting the interest of—and therefore the ranking by—search engines. A ‘good’ SEO specialist will tell you exactly what it will be doing and what results it hopes to achieve. And a ‘good’ SEO specialist will never claim that it can guarantee you a Google top spot. I’m afraid that whilst SEO is an essential promotional tool in your marketing arsenal, it is not the be all and end all of online promotion; rather, it is just one important detail to get right.

Author: Bill Morrow of Angels Den—where entrepreneurs and investors meet.

If you’re looking to set up an online business, you might consider talking to the chaps at www.scribbles-writing-services.co.uk for copy-based SEO advice. And if your business could benefit from a cash injection to launch or develop a product, or to build on its current success, then why not visit www.angelsden.co.uk to see how our angel investors could give your business the boost it needs and deserves.

Interview With Bill Morrow and StartUp Lucky

2009-04-17T09:39:00.004+01:00

Our very own Bill Morrow gave a great interview with StartupLucky talking about his background, how he came to co-start Angels Den, how it works, how we work with Angels and Entrepreneurs across the world, the problems that entrepreneurs face when getting angel investment and why passion works.

Live video by Ustream

A Very British Perspective On Small Business Funding

2009-04-08T13:21:00.000+01:00

We Brits are a funny lot. Unlike other nationalities, we seem to endure a regular inner struggle with the concept of entrepreneurial spirit. The challenge of launching a venture is all too often snuffed out by the desire for a safe, comfortable life, and we don’t always find it easy to praise others when they succeed in business. Yes, our great nation has led the world, given it incredible inventions, adventurers and stories of great heroism and achievement but in recent times we have turned into savers, plodders and procrastinators more familiar with safety and security than tenacity and chance. However, as we face the deepest recession in decades is this “very British” attitude beginning to change?

The launch of a new venture into the big wide world is often only possible with the injection of more capital than an entrepreneur can themselves invest. With the banking world in complete disarray, entrepreneurs have been turning to business angels to provide small business funding. Such business angels must have an adventurous spirit, something we Brits are not particularly comfortable with, so one would have thought that in this difficult economic period, angel investors would be fewer in number and harder to please? Well, no. In fact we have seen increasing numbers of wealthy, successful angel investors registering with us at www.angelsden.co.uk seeking to assist fledgling businesses to launch, grow and shine. So what is it that is spurring these small business funding experts into action in these dark times?

Business angels know that no matter how careful they are with their due diligence they are still gambling with their own money. Sometimes small business funding will come off and make everyone very rich and happy, at other times all will be lost for reasons nobody could have predicted. Nonetheless, it is the demystification of small business funding, the popularity of angel investing on TV and the fact that so many individuals are successfully reclaiming their financial destinies from their confused brokers that has resulted in an increase of calculated risk-takers prepared to lay it all on the line for a business investment they truly believe in.

The Blitz spirit is alive and well. At a time when you’d expect we’d all be battening down the hatches, bringing in the cat and setting our alarms to wake us when the recession’s over, we seem to be becoming more adventurous … is this really true? More and more small businesses are starting up with the help of business angels and even more are signing up with business angel websites like ours to find the perfect partner. There seems to be a new determination to drag this country back out of the economic doldrums, to unshackle ourselves from our risk-obverse persona and reward those individuals who succeed. How very “new British” of us!