Managing Business Angels as investors for SMEs in an STPs Accelerator

As wealth creation through business has grown so has the number high net worth individuals (millionaires). The rapid rise in the numbers of these individuals is occurring all around the globe with the spread of the market economy approach to economic development. So, just as there was an explosion of high net worth individuals in the USA from the 1950s onwards and in some parts of Europe from the 1990s, so now there is a similar explosion occurring in India and China and other emerging market economies. The common trait of such individuals is that they are good at business; they like business and many take a pleasure in working with entrepreneurs who they think have a good idea. The help to entrepreneurs can take the form of mentoring but a more natural instinct is for such individuals to invest their own money in these young companies in the hope of participating in another profitable business activity. However, in addition to making an investment they also provide business experience and contacts to help their investee. When this happens the investor is known as a Business Angel. This paper is about how an STP, and particularly an STP with an accelerator programme built into its incubator, can tap into this substantial source of investment opportunity. The methodology proposed is based on experience and some important research into the factors that make for successful Business Angel investments.