Business Angels and Equity Investment :
New-start companies often struggle to find capital, especially if their fledging business is based around new technology. They lack assets and a track record for the banks and often they don't yet have the market traction and larger size the venture capital funds prefer.
In Northern Ireland , we have several options but there are two key providers with whom Paradigm would work most actively . We have a business angel network , for the fledgling , younger business and a home grown private equity house for the more established business with a clear growth agenda and exit strategy .
The business angel network is designed to fill the funding gap by connecting high net-worth individuals with the smaller companies in a structured manner. Angel investors, often in groups or syndicates can invest and also provide invaluable skills and experience on a mentoring basis .
They try to assist new ventures to develop their business model, find the right people and skills they need and ultimately to source the capital to make it a reality.
The Business Angels tend to meet bi monthly with a large group business angels – usually in excess of 20 in attendance . Around 5 companies, who have been carefully filtered and prepared , pitch to this audience in a format designed to allow maximum interaction on the night. Angels are also able to review pitches by video from a secure website to further increase the chances of interest. The network would also try to match angels or groups of angels to specific companies between meetings.
Our private equity partners operate at the slightly larger level and add value both in terms of investment and more importantly in encouraging the management team in becoming owners in the business. This upgrading of an employee mentality to a sense of ownership often creates the motivation, drive and commitment to take the business to the next level.
For a family-owned business, the shift to a more corporate structure with a board of non-executives , the increased credibility with banks, suppliers, customers, etc , the availability of broader support networks; and the courage from having a financial backer, also contribute to the improved dynamics of a private equity backed company.
Our equity partner was established as an evergreen investment fund in the late ‘80s . Since the initial £7 million capitalisation , £27 million has been invested in 39 companies producing a very attractive return after covering running costs and considerable taxes.
Paradigm Niche Planning have successfully worked with both of these parties in recent months and are happy to introduce clients where appropriate .
