Any "Business Angel" experience?

[Janice]

I am currently looking for funding to get my project up and running. There seem to be quite a few "business angels" around but I really don't know if they work.

Are there any "business angels" here?

Has anyone here been helped by a "business angel"?

Do they ask for a percentage return on investment or would it be a percentage return on profit?

Can you buy them out after, for example, 5 years?

I have made a very large (very large for me) initial investment and I'm just so frustrated that I can't continue.

Any other bright ideas on where I could find finance?

Thanks in advance
Janice

 

[Power Lunch Club]

Hello Janice,

Are you able to share a bit about your business and possibly more of what you are looking for.

Business angels, tend to start looking at £250K+ and look to make rapid return on their investment.

 

[PeterHoggan]

Janice,

Check with your local gestoria there may be some assistance aviliable, grants, free office phones etc.

 

[Janice]

Hi Guys,
Thanks for answering.
I have looked for grants, been in touch with my local development agency, appearead on TV in a Spanish programme for business people looking for finance (I didn't win - they told me I would succeed without them but some of the younger contestants needed help. At the point where I was knocked out I was winning :cursing: )
My project is a residential academy. A small hotel but dedicated to language learning. A total immersion programme. I would teach both Spanish and English.
As well as language there would be a cultural aspect to the course with weekend visits to local places of interest such as Seville, Doñana National Park, The Aracena mountains, local bodegas and ham curing companies.
There would also be optional golf days out, cookery classes and dancing classes.
The actual premises will have 9 en suite bedrooms, bar, restaurant, swimming pool and small gym.
I have bought the land, had my plans drawn up, got the building permission and started the build. It was at this point that the bank who were going to finance 50% changed their mind. :cursing: I did try to take that further and went to their head office to complain but I had nothing in writing, only a Bank Manager's word. Something which I had believed in up till then but will never believe again.
I have put 400,000 euros into it and am looking for 300,000 euros to finish it.
My children are still at home and don't want me to sell the famly home in order to put more money into the business. I have sold everything I have as well as raise a mortgage on the family home to get as far as I've got. Their lives have changed too much and I don't feel I can let them lose the stability of our home in order to get to my dream.
I thought that a "Business Angel" may be the answer.
What do you guys think? Any advice gratefully received.
Janice

 

[Employment Law Services]

Hey Janice.........you could try LINC. They are a non-profit organisation that put together investors and individuals looking for funding.

Here's the link to their web site: LINC

 

[Janice]

Hi Intrepid,
Thanks for that
I'll give them a try and let you know how I get on
Janice

 

[Employment Law Services]

Hi Intrepid,
Thanks for that
I'll give them a try and let you know how I get on
Janice

My pleasure................Good Luck!! :thumbup:

 

[Adventurelife]

Hi Guys,
Thanks for answering.
I have looked for grants, been in touch with my local development agency, appearead on TV in a Spanish programme for business people looking for finance (I didn't win - they told me I would succeed without them but some of the younger contestants needed help. At the point where I was knocked out I was winning :cursing: )
My project is a residential academy. A small hotel but dedicated to language learning. A total immersion programme. I would teach both Spanish and English.
As well as language there would be a cultural aspect to the course with weekend visits to local places of interest such as Seville, Doñana National Park, The Aracena mountains, local bodegas and ham curing companies.
There would also be optional golf days out, cookery classes and dancing classes.
The actual premises will have 9 en suite bedrooms, bar, restaurant, swimming pool and small gym.
I have bought the land, had my plans drawn up, got the building permission and started the build. It was at this point that the bank who were going to finance 50% changed their mind. :cursing: I did try to take that further and went to their head office to complain but I had nothing in writing, only a Bank Manager's word. Something which I had believed in up till then but will never believe again.
I have put 400,000 euros into it and am looking for 300,000 euros to finish it.
My children are still at home and don't want me to sell the famly home in order to put more money into the business. I have sold everything I have as well as raise a mortgage on the family home to get as far as I've got. Their lives have changed too much and I don't feel I can let them lose the stability of our home in order to get to my dream.
I thought that a "Business Angel" may be the answer.
What do you guys think? Any advice gratefully received.
Janice

Hi Janice

Welcome to the forums

These are just my views based on a few years of building various businesses

1. Do it with your own money if you can, flog, mortgage etc etc

2. Use the banks after the above, try as many as you can. As you have already sunk money in the banks may be interested if the future value of the asset stacks up. They probably will not be interested in your business idea just that value of the asset.

3. Angels should only be used when the above cannot be done and every other route explored.

Why? It is expensive often very very expensive. They will want a large % and and exit plan that gives them back there £ plus % in relatively quick time.

Also it is worth putting yourself in their shoes for 5 minutes and explore what you are asking them to do and what they are risking . This needs to be done with a totally detached view.

In the case you describe above I suspect most would want a majority stake in the finished property to protect their investment as the business model is unproven? Or have you been running the business prior to the build project?

Sorry if the above is not much use, private funding or the banks are bay far the best route but in this current climate I do know that is going to be very difficult.

Peter

 

[profitxchange]

I agree with adventurelife; BA's are not the route - they are unlikely to fund you anyway and the business model may not be able to generate the exit funding they would need. It can be several multiples of what they put in. Equally they look very hard at the team running the business and they must be very good - to keep the chance of success high. this means you have hi employment costs.

Can you modify your business model to start within your means and grow organically?

 

[johnthesearcher]

Hi Janice

I just picked up this thread and would totally agree with Peter (AdventureLife)and Gordon's points made above.

Most Business Angels I have had involvement or experience with are 'dragon's den' types and deal primarily with high end/quick return investments usually in the property or research and development sectors.

The reason being is that European Regional Development Funding (ERDF) applied initially to those sectors and therefore were considered 'SAFE' investment opportunities.

However, that said I would appreciate being told that does not really help your funding shortage but.......... the upside of giving the following some thought is that if you did manage to find an investor, the amount you may require would be lower and it would add to their 'confidence' in your business model inasmuch as you have tried a number of ideas to raise funding to support your project.

You mention the following ......

My project is a residential academy. A small hotel but dedicated to language learning. A total immersion programme. I would teach both Spanish and English.
As well as language there would be a cultural aspect to the course with weekend visits to local places of interest such as Seville, Doñana National Park, The Aracena mountains, local bodegas and ham curing companies.
There would also be optional golf days out, cookery classes and dancing classes.
The actual premises will have 9 en suite bedrooms, bar, restaurant, swimming pool and small gym.

Have you considered approaching..........

1. Tourism and Education authorities (as you are engaged in cultural exchange)

2. Some of the organisations or companies you mention above and who could benefit directly from you completing your project, and promoted their services exclusively.

I'm thinking out loud here but say you also put together a marketing brochure and offered ad space to some of the big players in the area. (could generate healthy annual income)

If you were selective they may 'catch your dream' and give you some financial investment in return for you promoting their services.

3. Some of the big Spanish football clubs may have funding available for indigenous projects ......you never know!

4. You could approach some of the suppliers of services like gym equipment and your swimming pool supplier to give you sponsorship in return for referral of their products etc.

I really hope that some of the above helps

Go get them...........

John

 

[Janice]

Hi Guys,
Thanks to all who have taken the time to answer and give advice.
Adventurelife: Thanks for taking the time to explain to me the reality of BAs. You have convinced me that it is not the way to go.
Profitxchange: I should have started smaller and am now doing smaller. The problem is my half built building and the investment I have put in. It has to be finished.
John: I have approached Tourism and Education authorities. They will support me with courses etc. but I have to be open. They will not give me grants to finish my building.
I have approached local companies but they are not willing to invest but will be happy to collaborate and help out when I am open.
Spanish football clubs are on a different level from my wee project. They have all the services I am going to offer close to home and when they are not close to home they are in 5 star establishments.
I have approached some small firms and I will get some freebies in exchange for promoting products but I have to be open.
I really have gone down every avenue but I just seem to meet dead ends.
Thanks again to everyone.
Janice

 

[Adventurelife]

Hope it all works out for you, keep at it and I am sure a solution will be found.

This may not be of help but it is a solution.

Mothball the building site, just put protection in on what is there already. Find a suitable building for what you want to do and lease it and make the business work. There will be a huge amount of suitable buildings available in the current climate.

Even before you get to the point of leasing a building get marketing and selling and delivering your courses and just rent accommodation for the course duration.

By the time you have the business on its feet and making decent money the banking situation may be at a stage where they will look at lending in a better light and you may be able to finish the build project

Peter

 

[Janice]

Hi Peter,
That is what I have done, left the building site. I know that there is nothing that I can do with it at the moment.
Taking on a building that would suit what I want to do is not really an option at the moment as I don't have sufficient funds to make the necessary alterations however I am doing my teaching on a small scale. I don't even need premises. I go to people's houses and teach groups of 4 - 6 people.
I have also taken on the role of troubleshooter. It is amazing how many people have problems simply because they do not speak Spanish. A list of the tasks I have had to do withing the last week include; sorting out the reason for an overcharge on an electricity bill (the wrong metre was being read) doing the paperwork for a car sale, changing UK driving licences to Spanish licences, doing paperwork for a pensionar to have access to the Spanish social security system, going to school when a small child fell over and taking him to the Doctor, finding a glazier to fit special size windows, interpreting at various community meetings. etc etc etc
I haven't sat still since it all went wrong and am managing to make a decent, though not fantastic, living.
I have come to the conclusion that the best way forward will be to sell my home. As I said in a previous post, my kids don't want me to do that but when things eventually pick up (maybe in a year or so) they will both be at a different place in their lives, will be a year older and may be able to understand why I need to do it. They are 21 and 23. At that age a year can make a big difference.
In the plans of the project there is a three bed apartment for us to live in so we would never be homeless.
Peter, it was you who suggested that I do it with my own money and I think that I have known all along that that was going to be the only solution.
My idea was to sit it out till things get better but I thought that maybe a Business Angel would help me get there sooner. Seems as though that is not the case.
The input from everyone has been invaluable. It is amazing how sharing problems with strangers helps make things clearer.
Thanks

 

[Employment Law Services]

Hi Janice - I was thinking about your situation and of 'out the box' options to secure funding that might help you avoid selling your own property.

Not sure if this idea would appeal but here goes anyway........

Instead of targeting 'business angels' have you thought about targeting normal people who are looking to make long-term investments for a reasonable return?

With the state of the current financial markets, many pension funds have lost significant amounts of money (mine lost 25% in less than 12 mths) and interest rates on savings accounts are the lowest they've ever been.

The property market has equally declined and so it's a buyer's market and many people with money to invest are looking for opportunities.

Have you considered speaking with IFAs, Estate Agents, Mortgage Brokers and asking them to help you find people that are looking to invest.

Yes, you'd have to effectively split equity in your business across a number of people but no one individual other than yourself would have a majority holding and any 'business angel' would expect at least a 35% share holding anyway so you're no worse off.

It just strikes me that finding 5 or 6 people to invest 50-60k euros each, who wouldn't be expecting an immediate or substantial return on their investment, would be a lot easier than selling off nearly half your business to a 'business angel' who would insist on a substantial and prompt return OR selling your own home.

Just a thought............good luck either way, your business sounds great!!

 

[Janice]

Hi Intrepid,
I have tried looking for a partner but up till now have had no luck. I enthuse people with my project and get them interested but when it comes to the bottom line nobody has the money or is able to get the money.
In my wee area we don't have any competent IFAs or mortgage brokers. You go to the bank yourself. Remember when that used to be the way?
In my quest to earn more money I worked as an Estate Agent for a while. Again, lots of interest but no takers.
Wouldn't it be a great idea to get the first SBF funded business?
Following on from your great idea of getting 5 or 6 people together. Maybe these people are here.
Come on guys, you know you want to.
Everything would be above board, everyone on the deeds stating their participation in the business and in the premisies.
Read in the paper yesterday that the Andalucian Tourist Authority is spending money on advertising in the UK to encourage people back to Andalucia. They are promoting different types of tourism, not just beach and sun. One of the campaigns, which will start in October, is promoting golf. They will be paying to encourage people to come to my area. Within half an hour of my wee dream there are about 8 courses.
Often in couples there is one who loves golf and the other who doesn't. I can look after the one who doesn't with my Spanish courses, cookery, dancing etc. while the other half goes out and spends the day enjoying the golf without feeling guilty.
Intrepid - you could have started something here.
The ball is rolling - let's see if anyone picks it up.
Janice

 

[johnthesearcher]

Hi again Janice - just another angle which may help.

Following the Intrepid thought process above I had .....what seemed to me at least....... a moment of inspired thought (not a sight for the faint hearted)

What if you wrote up your story (written in a non advertorial style)...... on...... why you moved to, what gave you the idea of the business, and a summary of what you are seeking to achieve with your project etc.

Once you have the core press release/feature/article in writing you could then submit it to all the mainstream Golfing magazines and golfing blogs, in the first instance, with an interesting headline.

Headline: "At Last - A Solution to 'golf widow' Syndrome" or something which will catch the readers attention. Publishers are always looking for a story with a twist.

You could also submit a reworked version to suit each niche/target audience to ......... almost any magazine/publication that you can think of which has a link to or would benefit from your project.

If you have your contact details threaded throughout the piece - you never know who may read it and contact you.

Hope this helps

John

 

[Janice]

Hi John,
Another great idea. (I hope that in your moment of "inspired thought" you were alone, or at least not in the company of small children.) I will start writing and researching publications that may be interested in publishing a piece.
I know that the key to finishing it is infecting someone else with my enthusiasm and belief in the project. With your idea more people will hear about it and maybe that "somebody" I need to find will appear.
Thanks
Janice

 

[johnthesearcher]

Hi Janice

Thank you for your kind comments.

Enthusiasm trully does breed enthusiasm.......... and remember "Share a good idea often enough and it will eventually be seen and heard!"

There are people out there who need your project .....the only problem is that they don't realise it .....YET!

All you have to do is tell them you're going to tell them ........ then tell them.....and finally tell that you have told them!

I pinged you a longer email earlier which I hope you get.

John