This blog discusses business angels in Ireland as well as about HBAN (Halo Business Angels Network).
According to 2016 Global Entrepreneurship Index, Ireland is ranked 12th in the top 20 global hot spots for start-ups with a score of 65.6. For start-ups, business angels play an important role in providing an invaluable source of capital .
Business Angels or ‘informal private investors ‘are high net worth individuals who invest on their own or as part of a syndicate capital in companies.
They can work in syndicates so risk can be spread further and their investment decision is based on their experience in a particular sector. Apart from money they also help the company with their skills, experience, and contacts. In return, they receive equity stake and expect to exit their investment in 3-5 years. The average initial investment ranges between €50,000 and €250,000 individually, or up to €500,000 as part of a syndicate (partnerships with other Business Angels). They do not like to invest in just an idea. Therefore, entrepreneur normally engages with an angel just before the last stage of technical development or and early market entry. Angels typically invest in deals earlier than venture capitalist and is always a minority investment (usually 10 –40%). According to a survey of 158 UK-based angel investors in 2008, 56% of investments failed to return capital .However, 9% generated more than 10 times the capital invested.
The angels’ investment can be undertaken on an individual basis and thus, information is private and makes it difficult to evaluate activity and performance. A fraction of the market is represented by angel groups and networks. The data collected from such market indicates that in 2009 Ireland had a small angel network compared to other countries, ranked 16th out of 26th countries. However, in 2010 OECD identified 7 syndicates/networks at various levels of development. In terms of deals per angel / group, Ireland ranked 3rd of the countries examined. Hence, Ireland compares well relative to other small countries. The data on the amount invested comparatively is not available .
Enterprise Ireland supports the Halo Business Angels Partnership(HBAN) programme. It is responsible for the development of business angel syndicates on the island of Ireland.in 2014, business angel investors € 9.4 million in 49 companies.
According to HBAN, a company should meet the following criteria to raise funding:
• A product that is about to be commercialised.
• Pre-revenue is weighed up with some early market traction preferably.
• Management team with relevant experience.
• Recognisable market opportunity.
• Internationally scalable business model.
To engage with the HBAN syndicates and network, companies must submit an application at http://www.hban.org/Entrepreneurs/How-can-HBAN-Help.153.html .