Individual angel investments range anywhere from 10,000 pounds to 250,000 pounds, although most angels invest less than 50,000 pounds, according to NBAN, a network that was created in February by the Corporation of London, together with a group of leading accountants and Barclays, HSBC, Lloyds TSB, the Royal Bank of Scotland and NatWest. With low interest rates and volatile equity markets, angels such as Mr. Crowe tend to view private equity financing as a challenging way to diversify their investment portfolios. Others like Christian Schneider are motivated by the desire to help new entrepreneurs get started. Now, there are eight companies under his guiding wing. Indeed, having fun seems to be a goal of many angels.
Some business angels warn that start-ups tend to underestimate their financial needs.
You risk investing more than you want or having your share diluted. Nor is finding a business match easy. Mr. Cardew of M.Power met with eight angel candidates before hitting it off with Mr. Crowe. When dealing with an unknown company, be sure to obtain professional assistance for evaluating financial accounts and business plans, structuring deals and drawing up agreements. Local networks often provide lists of professionals, such as tax accountants and financial advisers, fellow angels and target companies.