Angel investors: The real-life Dragons' Den
Away from the high-profile entertainment of the BBC's Dragons' Den programme, thousands of UK entrepreneurs regularly attempt to raise capital by pitching their companies to so-called angel investors.
Envestors is a London-based angel network, which has over 1000 certified 'high net worth individuals' on its books who are looking to back early stage and start-up ventures.
Founder and director Bob Taylor explained that the vast majority of business plans they receive are rejected as unsuitable, but when a proposition seems viable they will be signed up and given the opportunity to polish and publicise their investment. Envestors receive a fee from the entrepreneur for the service and take an equity stake in the company if a deal is successfully negotiated.
The business plan and equity proposal is circulated among prospective investors, before a physical pitch is made at an presentation event. But attracting interest at this stage can be only the beginning, as potential investors undergo lengthy legal work before committing funds.
One company hoping to raise finance is Loco2, who have developed a website where customers can buy rail tickets from around Europe. Managing Director Jamie Andrews said securing investment via an equity stake was the only way his young company could raise funds, and whilst the risk for the business angels was higher than taking a stake in an established company, the rewards for all could be huge.
Video Journalist: Andrew Humphrey
13 Feb 2013