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Business Angel Funding - Halo Funding
New companies, especially those based on new technological ideas, usually find it very hard to find funding. Banks are structured to lend to companies with assets and track records and venture capital companies are more often interested in established companies who are already gaining some market traction.
One of the best routes to seed funding for these companies is business angels. These are high net-worth individuals with an interest in investing in companies with the potential for high growth. These angels are aware of the risks involved, however by investing in a portfolio of companies they spread these risks. They also rely on a small number of these companies to do extremely well in order to cover the losses on those that do not. The government Enterprise Investment Scheme provides generous tax relief which can significantly improve the picture for the business angel. In addition, business angels often bring commercial experience and a great list of contacts which can otherwise be hard for early-stage companies to access.
Investing is normally done by shares, which are typically held for 3-5 years. Business angels can stay involved in the business, but more often 'exit' by selling their shares especially if the company has done well and is sold to anther company (trade sale).
Most business angels are most interested in companies with high growth potential, many of which will be based on new technology. However the halo angels have also made it clear that they do not wish to restrict themselves to solely to this type of company. Lower tech, traditional, later stage expansion and even potentially rescue/refinance situations can also be considered.
The administration of halo is funded by Invest Northern Ireland and Intertrade Ireland with the purpose of stimulating angel investing in NI-based companies.
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