A Business Angel, also known as a proximity investor, is an individual who contributes capital to newly created companies in order to finance and invest in them. In addition and as a general rule, the business angel not only provides financing to the company but also contributes their time and knowledge, so that they are actively involved in the decisions of the company.
The Business Angels they have a fundamental role in the creation of new companies since with their growth in recent years they have become one of the main sources of financing for them during their creation. Thus, business angels fill two shortcomings of companies in the initial stages: lack of funding and lack of experience. In addition, Business Angels assert their networks of contacts, usually grouped into networks that facilitate cooperation between investors.
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Main features of Business Angels
- Its priority purpose is to obtain profitability from the investment.
- These are people with a high economic capacity,and the money they invest is always their property.
- The investments are made in companies where they do not have any kind of kinship or close relationship or friendship.
- Investments occur during the early stages of the company’s life and always in newly created projects.
- Their contribution goes beyond the monetary, and extends to their contacts and business knowledge.
- They also invest time to get involved in the development of the company.
Business Angels Networks
There are several networks of Business Angels that facilitate the meeting between investors and companies. In Spain there are more than 50 of these networks, in addition, the government for years has promoted the strengthening of the smismas. Among the most outstanding Spanish networks are Business Angels Network Madri+d,the Spanish Association of Business Angels Network or Keiretsu Forum.