The other week I held a meeting with several Business Angels. We drew up a list of reasons why Angels invest (although no-one said which applied to them). So why do Business Angels spend their time, money and energy on/with small businesses and their owners?
The reasons that Business Angels make investments that we came up with are:
- To make money. Want more money out than you put in? Then that’s converting your time and investment into a bigger reward in the future.
- To get involved with private companies. If you think it’s fun working with the leaders of unquoted, private companies then this may describe you.
- To learn new things. For some people, life is all about continuous learning. Being a Business Angel gives you experience rather than text book knowledge.
- As a hobby job (unpaid). At the moment you may have lots of spare time and want to do something useful with it.
- To find a job (paid). Perhaps you have some money to invest but still need an income to survive in the long term. A full time job may be what you are seeking in companies that you invest in. Perhaps this is really a “MBI” (Management Buy In).
- To help the community. You want to help a good cause; something that will benefit everyone in the long run.
- Because a friend of a friend has a business. You stumbled into being a Business Angel because you wanted to help a friend, a friend of a friend or member of your own family.
- Something to talk about at parties. Helping a company can provide you with great stories and anecdotes that are good at parties or after-dinner speeches.
- Next life chapter. You’ve done the MD / CEO / FD / etc. role and now it’s time for something different. So being a Business Angel is another chapter to your life now that you earned enough to be comfortably off.
- Unemployable. Let’s be realistic. You’re unemployable and have some cash. So being a Business Angel is a good job title until we work out what to do!
What we don’t have a feel for is how many Business Angels fall into each category and whether this is an exhaustive list. Therefore I’ve put together a little survey. Please take a few minutes to rate your reasons by clicking on this survey “Business Angel Drivers” (the URL is http://www.surveymonkey.com/s/3HT69D2). The survey is anonymous (if you don’t enter your email address and even if you do it will be completely confidential). Once you’ve completed the survey please ask another three people to complete it. The more people that complete it, the more accurate the results will be and the sooner we’ll have an answer.
I’ll let you know all the results when 50 people have responded so that we can make sure that companies looking for funding know what we are looking for. This should help them to understand our position and save them, and us, a lot of time.