Business angels take flight - just when small businesses need them

An interesting article from Andrew Stone this morning in the Sunday Times highlights the growing funding problems faced by small business who are looking for external investment by business angels…

Here is the article.

Lots of really useful information in the article for students:

- The distinction between business angels and venture capitalists (a common error made by nearly all textbook is that these two are the same - they are not!)

- Business angels increasingly focusing on their existing portfolios rather than investing in new opportunities

- Venture capitalists typically not looking at any investment where the funding the requirement is less than £10m

- Finance requirements for SMEs are growing, as they begin to restock following the recent economic downturn = an increase in working capital

- Banks still not lending at previous levels - which increases the need for equity finance

- Start-ups and fast-growing SMEs increasingly looking to tap into alternative sources of finance, including local business networks and even customers. Will King’s Shavings Bond issue which he described at the tutor2u teacher conference recently is a cracking example of this.