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Investment avenues for growing companies

The availability of finance is undoubtedly one of the major challenges faced by young and growing businesses.

Melanie Yeomans

Melanie Yeomans

Access to the right kind of finance is crucially important for the success of businesses in our regional SME markets.

One form of finance that we are increasingly seeing is the use of Angel investment.

Angel investors are, typically, high net worth individuals who use their personal funds to invest in growing businesses.

They can be invaluable for early stage companies who perhaps do not have the “story” or track record to present to the more traditional venture capital market.

In addition, Angel investors are often individuals who have grown and exited businesses and so can bring with them invaluable strategic advice and contacts as well as much needed cash.

It is important for businesses considering Angel investment that they choose their Angels well. Try to choose Angels that are sector-specific. They will be familiar with the risks in your particular field and presenting to them will be a more straightforward process.

We are also increasingly seeing Angel investment being employed alongside more traditional venture capital investment on a matched funding basis.

This gives the institutional investor the comfort of seeing the availability of finance in addition to their own and can greatly enhance the potential for attracting the larger institutional funds.

Attendance at the UK Business Angels Association conference held in Manchester for the first time earlier this year was evidence of the growing interest in this particular form of financing and provided a fabulous forum for companies to meet potential investors.

On a more general point, and happily for our region’s growing SME market, you do not have to look to London for financial opportunities.

For the North West market, we are now starting to see investments coming through from the new Northern Powerhouse Investment Fund and in recent years the North West Fund has helped many young companies in the region on their way to success.

As with all major divisions affecting your organisation, it is important to take the right professional advice.

Corporate lawyers and finance professionals are there not only to “do the deal” but to advise and assist businesses by sharing their experience in the funding arena.

At Ward Hadaway, we delight in working with businesses from an early stage and helping them to grow and prosper in our flourishing region.

* This article first appeared in the Ward Hadaway Greater Manchester Fastest 50 Awards Supplement 2017.

For more information on the issues raised, please contact Melanie Yeomans.

Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.

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