Where Has All The Money Gone?
New business funding is critical for entrepreneurs and start-ups that want to bring their innovative products or services to life, but it has been hard to come by over the last few years. The recent economic crisis has caused private investors to shy away from providing the level of new business funding they might have committed to in the past, leaving new ventures to rely on other sources for early stage investment. While this has naturally made it more difficult for new businesses to prosper and grow to their full potential, Angel investors who choose to continue to hold back their funds may well end up kicking themselves when they realise the missed opportunity they allowed to saunter right by them when profits start to mount over the next few years.
The National Endowment for Science, Technology and the Arts (NESTA) recently released a report stating that returns on investments retained their stability during the recent recession, which suggests that companies backed by investors between 2004 and 2007 were more resilient to the market fluctuations than might have previously been thought. NESTA also predicts that Angel investors will jump back in to providing new business funding in 2010, but at lower levels than previous years.
What Angel investors should really be doing right now is snatching up the fantastic bargains that are currently to be had, as well as taking advantage of the opportunities to get in on the ground floor of new and promising business ventures. We are already seeing the signs of economic recovery, and although shaky right now, growth is expected to strengthen over the next few years. This means that now is a great time to be making investments. Business Angels, stop guarding your coffers, it’s time to open your capital up to the adventurous and exciting world of new business funding. Expand your portfolios, grab a great deal, help a fantastic idea to get off the ground and reap the rewards as the economy strengthens.
Aside from setting themselves up for a nice return in the years to come, Angel investors who step up to the plate with new business funding at this critical time will be bolstering the British economy and assisting in its recovery. Whether you buy into the new Government’s “Big Society” rhetoric, we all have our part to play in helping the country out of the mess it’s been in. As a business Angel you can have both the moral and financial satisfaction of doing so, and by taking a pragmatic view, what’s good for the economy is good for a business Angel’s portfolio.
So, to sum up – by providing new business funding now, Angel investors can get great investment deals at bargain prices; assist a new business to prosper and grow; get in on the ground floor of the business; set themselves up for a nice return in a few years and make a difference to the British economy. That’s not bad for a day’s work.
