What financing does a BA provide?
Business Angels help cover the lack of financing that entrepreneurs face in the early stages of their companies’ life cycle. It is very difficult for an entrepreneur to obtain bank financing in early stages, when there are high levels of risk, a lack of liquidity, and insufficient guarantees.
At the same time, the amount of funds required by new companies usually exceeds the capacity of the entrepreneurs and their family and friends, and it is also difficult to attract the interest of venture capital firms because of both the stage of development and the investment size.
Investment
Individual investments usually range between €5,000 and €150,000 per project.
However, it is common for several business angels to invest together, so it is typical that between €20,000 and €400,000 are contributed to the same project.
For larger projects, it is possible to structure co-investment agreements with venture capital firms that allow reaching amounts above €500,000.
Although the Business Angel invests at any stage of the project, they play a fundamental role in the creation of innovative companies by supporting entrepreneurs in the early stages of their companies’ life cycle (Seed and Start-Up).