Angel investors invest a lot more than a couple of thousand. If you wanted to lock down a number, the smallest angel investment I’ve seen was £30k, and that was in the context of a Southeast Asian country, so you’d expect higher investments in the west. Happy to hear others’ thoughts, who participated in fundraising. Maybe smaller amounts exist, but dimensionally, you should think 10x of that couple of grand, if not 100x.
However, you need more than the money. A few quick things I can think of:
- Relationships in the given niche / private equity / big tech / startups that take years to build. They are essential to hear about companies and opportunities (and these relationships are probably the best news source).
- A solicitor who draws up the necessary paperwork.
- Your time or experts to do due diligence on the people, tech, finances, legal.
- Probably a lot more I can’t think of right now.
Does that mean you are locked out of investing in startups?
Absolutely not, that’s what awesome platforms like Crowdcube and Seedrs are for. The UK is a fantastic place where not only high net worth individuals, but about anyone who understands the risks can partake. And we haven’t touched on the SEIS and EIS tax reliefs.
The solution could be to ask more startups to crowdfund. It’s tempting to accept a cheque from a VC and have the money on your account in one go, within days, and have it promptly written up by Techcrunch, because VC investment is, wow, such exciting news (I’m being sarcastic here - I hate that TC basically became a PR syndication site for VC firms).
If you are a startup, there is a strong argument for cutting your users in, and have them participate in your growth. So, email the team, and get their thoughts on whether they could do it when they do fundraising next. Ideally on the same terms the VCs receive. I surely got emails about it on a daily basis even before we announced we’d raise again.