21/06/2017

The importance of a radar in the investments of a "Business Angel"

By

Managing Partner

In Portugal the concept of "Business Angel" is relatively recent and trendy. It is trendy because in one hand more and more entrepreneurs with attractive and viable projects appear in the market, but without the financial capacity to execute them and on the other hand, there is an increase number of individuals with the financial availability to invest in these projects.

Typically Business Angels are people with limited available time, but who want to invest a portion of their available financial resources in projects where they can bring value with their knowledge, contacts and relationships of trust acquired throughout the course of their life, obtaining personal satisfaction and return in the future.

The role of a "Business Angel", except in some rare cases, always involve keeping a distance from business activity and operational management, typically assumed by the entrepreneurs, allowing them to keep a critical eye and play the role of encouragement, inspiration, help and try to maintain their alignment with the course plotted.

This distancing from operations coupled with a certain trend that entrepreneurs generally have to neglect the economic and financial aspects of the business requires a constant monitoring of the business plan to minimize deviations and to try to project possible future events and their impact on the business activity and consequently on the investments made.

This monitoring presupposes the existence of service providers with the objective of supporting the “Business Angels” during the investment phase, but also in the pre-decision phase, mainly to support on the validation of the assumptions present in the business plan, presented by the Promoters and in the Preparation of the entire dossier prior to the entry of the capital and respective investment conditions.

Not having availability of time and / or vocation, these entities guarantee to the “Business Angel” an evaluation and permanent control of the projects in which they invests, assuming a “radar” function of their investments, providing in good time information of commercial, financial and operational management, which are fundamental to support decision-making.

In my particular case, the experience acquired by being an entrepreneur from very early on, and more recently by also being a "Business Angel", something that I do with great motivation, tells me that a project with all the starting conditions to be a success , without adequate control of its execution in its various aspects and in the right time, has little or no chance of survival.

The opposite case I believe it is different: less interesting projects can become much more interesting as long as they have opportune, systematic and timely management information that allows entrepreneurs to perform differently, create conditions for financial sustainability, reinvent their business or even to find new areas of opportunity, thus drastically reducing the risk of  the investment for the "Business Angel". They may not become a "Unicorn," but they are less likely to become part of the business failure statistics.

Business Angels Funding Entrepreneurs

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Rua da Cozinha Económica, Condomínio Alcântara-Rio, Bloco A 2-Dto
1300-149 Lisboa
38.703734, -9.17593

+351 21 361 61 20
info@steam.pt

Edifício Clube Náutico, Senhora Santana
7580-309 Alcácer do Sal
38.369226, -8.511614

+351 265 098 350
info@steam.pt

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