Business Angels 

What is a Business Angel or Private Investor?

These individuals are considerably knowledgeable about certain areas and have money to invest. They are dedicated to promoting the development of business projects with high growth potential during the early stages, bringing capital and added value to the management. The difference between business angels and traditional investors or venture capital lies in their involvement in business management.

As in the case of venture capital entities, these investors believe in a business project, they do not get involved with the day-to-day running, but they do provide added value.

Characteristics

The main characteristics of business angels are:

• They invest their own money.
• They invest it during the early stages of a company's life.
• Their investment decisions may not have a strict financial motivation (professional satisfaction, family links, etc.).
• They only invest in areas near their residence.
• The amounts invested are lower than the average amount invested by the venture capital entities in each transaction.
• Divestment is usually slower than in the case of venture capital investors.
• Profitability is usually lower than in the case of venture capital entities.

Business Angels Networks work to bring small- and medium-sized enterprises, which have recently started-up or which are undergoing a period of growth, and informal, private investors together. Business Angels Networks have two main functions: to group business angels together and to streamline the process for contacting interesting investment projects.

More information

• Guide to creating a Business Angels Organization [es]
• Spanish Network of Business Angels [es]
• Presentation of the study conducted by the Directorate-General of SME Policy: "Business Angels in Spain, a new way of financing SMEs", Mr. Albert Colomer, member of the Managing Board of EBAN [es]
• Business Angels, innovation in business financing [es]
• An analysis of compared taxation in the case of Business Angels in Europe [es]
• Proposal for tax measures to promote the figure of Business Angels in Spain [es]