The Business Angels or private investor are natural persons with extensive knowledge of certain sectors and with investment capacity, who promote the development of business projects with high growth potential in its early stages of life, providing capital and added value to management.
Private investors help cover the lack of financing faced by entrepreneurs in the early stages (associated with high levels of risk and lack of liquidity); they differ from traditional investors and venture capital, in their involvement in the management of the company.
Like venture capital entities, these are investors who are committed to a business project, without getting involved in the day-to-day, but providing added value. In addition to capital availability, these private investors tend to have a high level of knowledge in the sectors in which they invest. This knowledge, its management capacity and its network of contacts are very valuable for promoting the development of business projects that have high growth potential, in exchange for medium-term profitability.
As a legal form, they usually adopt that of a limited company. These investors usually organize themselves by forming networks. In some cases with the aim of converting in others as a form of cooperation in general.
- They invest their own money
- It is invested in the initial stage of the life of a company
- Your investment decisions may be other than strictly financial motivations (job satisfaction, etc.)
- They invest in areas close to their place of residence
- The amounts invested are much lower than the average dedicated by venture capital entities in each operation
- Profitability is generally lower than that obtained by venture capital entities
Main networks operating in Madrid
- Network of Private Investors and Family Offices. The objective of the Network is to facilitate contact between entrepreneurs in search of financing and investors in search of investment opportunities.
- Business Angels Network madri+d. Network specialized in technological projects of the Community of Madrid during its first years of life.
- Esade Ban. Network promoted by the ESADE Alumni Entrepreneurs and Investors Club. His preferred model is co-investment.
- Keiretsu Forum. The largest international network of private investors. In Spain it is promoted above all by the Caixa, the EOI and the Chambers of Commerce.
- IE Business School entrepreneurship. The Venture Days is IE's investment forum. It is quite focused on the best projects of the students or members of the business school.
- Spanish Association of Business Angels Networks. It brings together 25 of the main Spanish networks.