Our partner CyberForum e.V. organized the Business Angel Day in Karlsruhe with us today, where angel investors and capital-seeking founders meet and socialize. But what are Business Angels in the first place and what value can they provide startup teams?
In the startup scene “Business Angel” is already a long established term. Like many other names from the startup environment, it was coined in the US. Business Angels are generally understood to be wealthy individuals, who participate in a business idea or a business with active support in the early founding phase. Through this participation, the founders can develop their business ideas to a usable business concept, and then to a prototype.
Business Angels distinguish that, in addition to financial resources, they especially bring expertise and business contacts into the founding. Often, they are experienced entrepreneurs whose motivation is to help young, promising startups on the way to independence. They impart their personal entrepreneurial industry, management experience, and network contacts to the new generation of entrepreneurs. Prospective entrepreneurs thus benefit not only in financial terms, but also from the practical experience of Business Angels. In return for his investment, a Business Angel receives capital shares in the company and has a share of profits depending on agreement. As a Business Angel invests mostly in a very early stage, these investments are connected with a high risk of failure. Nevertheless, the position as companion from the founding of the company up to the proper establishment of the company is an incentive to become active as a Business Angel. Because the German venture capital scene currently acts very cautiously with respect to financing, Business Angels also play an increasing role in subsequent financing rounds.
Anyone who is interested in more detail on this topic or looking for a Business Angel investor, can establish first contacts in, for example, the Business Angel Network of the CyberForum e.V.