How much cash have you invested in your business?
By Venture Giants
How much cash have you invested into the business so far? Angel Investors want to see as much investment from an entrepreneur as possible. The rationale is if an entrepreneur has a serious financial vested interest in their company and its success, the entrepreneur will likely work harder to insure the business succeeds.
The perception is that if you invest £0 into a company, it makes it easier for you to walk away. If you have your life savings invested, you are most likely going to do everything possible to make it succeed. Angel Investors love to see this kind of commitment.
Just how much of your personal investment will satisfy an investor depends on the size of the business, industry and some other factors. It is a relative number based on many factors including how much funding you require. However, Angel Investors want to know how much you have personally invested, how much you are trying to raise and what percentage of the total amount they will be funding.
Your chances significantly increase if what you have personally invested is a reasonable percentage of the total capital required. In other words you are financially motivated not to walk away.
The ideal range for investment is really does depend on your business, region and industry but anything between £5,000 to £20,000 will be favourable for your chances of attracting business angel investment. The reason being that because you had invested some cash into your business, an angel investor will see this as increased commitment on your part. If you have personally invested £51,000 - £250,000 cash into your business, an Angel Investor will see this as significant commitment on your part.
The more an entrepreneur is willing to risk in terms of financial commitment, the more a Business Angel Investor is likely to perceive the level of seriousness that the entrepreneur is willing to put into his business and the greater the chances of success for all parties.
Venture Giants is a premier UK business Angel investment network and small to mid sized business networking portal that matches active business angel investors with entrepreneurs' seeking investment capital and business funding.
Written for and behalf of Venture Giants Enterprises Ltd. All rights reserved 2009
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