A new and exciting Angels Den Blog is coming soon.
In the meantime, check out some of our most recent press releases below.
Three Fifths of Start-ups Have Tried and Failed to Secure Traditional Financial Investment
According to a new study conducted by the UK's largest Angel Network, as many as half of UK start-up businesses have tried and subsequently failed to secure substantial financial investment from a traditional source, such as bank loans or by selling shares.
With raising investment online becoming an ever-increasingly popular option for entrepreneurs and investors, researchers at www.AngelsDen.com have conducted a study looking into how many start-ups in the UK are making the most of the funding opportunities available to them.
The team at Angels Den polled a total of 821 adults aged 18 and over for the purposes of the study. Each participant had been the individual behind at least one newly created start-up company within the past two years.
Individuals were initially asked to reveal how they managed to fund the bulk of their ventures, with the majority (58%) revealing that they used a combination of their own savings and some financial aid from family members or friends. A further 19% stated that they managed to successfully secure an approved loan from the bank.
When asked to reveal if they had tried to borrow money from banks in order to fund their start-ups only to be rejected, a total of 59% of participants admitted that this had been the case for them. When asked to reveal all of the reasons why they felt they’d been unsuccessful securing a loan through a bank, the most popular answers emerged as follows:
1. Unrealistic financial predictions/growth plan - (32%)
2. Lack of business experience- (28%)
3. Existing personal debt – (21%)
4. Age- (16%)
5. Poor credit rating- (9%)
When the respondents who’d tried and failed to get a bank loan for their start-up were then asked to specify which category their businesses belonged to, it emerged that the start-ups most frequently turned down for bank loans included those primarily focused on online/technology (14%), food/drink (8%) or health/fitness (7%).
Bill Morrow, Co-Founder and Director at Angels Den commented on the findings: “Unfortunately, it is all too often the case these days that promising start-ups with an excellent service or product to promote fall at the last hurdle, whilst trying to secure traditional investment.”
He continued: “Here at Angels Den, we’re witnessing a number of start-up businesses turning to angel investors and online crowdfunding in order to secure investment. Not only is it a fantastic way of raising investment, it also gives you the chance to get some experienced and well connected business people on board."
Two Thirds of Businesses Prioritise Expertise over Money When Seeking Investment
It has been revealed that, while traditional forms of investment focus on the financial offering, two thirds of small business owners are actually seeking business expertise as much as money. Furthermore, over half believe that there is not enough business mentoring available, and a quarter of those who have received funding have been turned away when asking their lender for advice.
Business investments are traditionally perceived as a purely financial gain for the receiving company, but two thirds of small business owners have revealed in a recent survey that they would like to see investment move away from solely financial means to further incorporate mentoring and advice. Over half of those taking part stated they don’t think there is enough business mentoring available and, of the respondents who had received some form of investment, a quarter had been turned away when asking their lender for advice.
Angels Den, the investment club and network, conducted the survey in order to find out more about what business owners want from investment and their experiences of seeking and receiving funding. 613 small business owners took part, all of whom had at some enquired about or received outside investment.
Respondents were first asked: “What would the ideal investment package consist of?” to which 76% stated that ‘financial investment with mentoring and business advice’ was the ideal investment. In comparison, only 12% stated that they were solely looking for financial investment.
All respondents were then asked to identify whether financial gain or advice and mentoring were more of a priority, to which 64% indicated that mentoring is more important than money when seeking investment for their business.
In order to explore this further, the survey then asked all respondents who had received funding if they had ever asked for mentoring or advice from their lender, to which 81% stated that they had. A quarter of those (26%), however, confirmed that they had been turned away without any advice and a further 34% stated that they had received ‘minimal or very brief advice and mentoring’.
All respondents were then asked if they felt that there should be more investment packages with appropriate mentoring support, to which 63% stated that there should be more of this type of investment available to businesses.
Bill Morrow, Co-Founder and Director at Angels Den commented on the findings: “It’s such a shame that so many business owners feel left out in the cold when it comes to getting the advice and mentoring that they need from time to time. Finding an experienced business person is willing to both give you the money and help you spend it is the difference between a spectacular company and an average one. Also, from the investors side your chances of seeing a return on your investment sky-rocket if you get involved.”
He continued: “The power of raising funding through Angels Den, and what sets us apart from our competitors, is that we have over six thousand angel investors with fantastic expertise, support and contacts, meaning the business is much less likely to fail. Offering mentoring is the real difference between investing on paper and investing whole-heartedly. There needs to be avenues there for all types of investors and businesses seeking investment.”