There are a variety of business angel investors groups that have formed in the UK.  One of the largest of these is the Angel Investment Network.  Another is the British Business Angel Association.  Access to many angel groups is somewhat limited, and usually these groups have specific investment and time requirement for all members.

What exactly is an angel investor?

Angel investors are high net worth individuals that invest in companies using their own private money.  Most times they invest in the early stages of a company and provide between $10,000 and $1,000,000 per deal.  They are typically males at least 45 years old and have been successful in business.  Their motivations differ greatly, and knowing what makes your potential investor tick is of great value.

Where can you find an angel investor in the UK?

If you have exhausted your network and still need more potential investors, you can try the Go BIG Network (www.goBIGnetwork.com).  The Network exists to connect investors, entrepreneurs, advisors, service providers, and anyone else in the startup community.  With the purchase of a subscription you can find angel investors in the UK.  In addition, you can find the angel investors that are best suited to your company based on their preferred investment amount and industry.  When you have found investors that fit well, you can contact them.

Alternately you can post a “Request” on the system indicating what type of investment you are looking for.  The idea of request is like a classified ad in your newspaper.  Investors browse these ads when they are searching for deals. 

Keep in mind that as with anything of value, raising angel capital takes time.  You should be actively pursuing capital months before you need it.  Be persistent in your search for capital.  You may need to attend industry meetings, visit local chambers of commerce, or do whatever you can to meet new people that could point you to other potential investors.  The most common way entrepreneurs are connected with investors is through the personal networks of each one.

Are angel investor groups better than individual investors?

Both angel groups and individual angels invest private capital, which distinguishes them from venture capitalists.  However, many angel groups function in similar fashion to a venture capital firm.  They pool together to share the due diligence burden and do larger deals.  Most of them are more sophisticated and can invest more money than the average individual angel.  In addition, because more businesses get screened out by angel groups, it is harder to obtain funding from them. 

If you are looking for funding beyond the range of most angels (e.g. more than $500,000) you may need to pursue angel investment networks.  Entrepreneurs who live in a more rural area should look for a “superangel” if they are seeking a large amount of funding.  Another advantage of angel groups is that they are relatively easy to find.  A quick search on the internet will usually be sufficient.

What are the advantages of getting access to an individual angel investor in the UK?

Individual investors may be able to provide flexibility in the structure of a deal.  They have a wide range of sophistication and motivation.  Some are rich doctors, lawyers, accountants, and other professionals that want to invest for the potential financial returns.  Others have experience and want to be involved in an advisory role.  Many times an angel group will be less flexible than an individual angel in the amount of control they require.